Goldman transfers coverage of Amazon (AMZN) to James Mitchell and boosts its price target to $98 from $75. Goldman sees AMZN’s long-term revenue growth rates as attractive, especially since it is achieving “new-store growth” with “same-store capex.” GS also thinks that more shoppers will turn to AMZN as the recession removes offline capacity:
We recommend buying Amazon stock because we expect its narrow investor base to widen out as:
(1) Growth-oriented investors see that Amazon is sustaining revenue expansion for longer than most internet peers, as Amazon’s investment of over a billion dollars in physical infrastructure historically limited but now entrenches growth; Amazon’s US revenue growth rate caught up with Google’s last quarter.
(2) Retail industry investors see that Amazon is generating “new-store” growth rates off “same-store” capex. We believe that a long recession could hurt Amazon’s stock but help its business model, by removing offline retail capacity and pushing consumers to shop online.
Shares are Bu. GS adds AMZN to its Americas Conviction Buy list.
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