It’s no secret that Amazon is a juggernaut.
The e-commerce platform is already one of the largest public companies by market cap ($US425.4 billion) and boosts a stock price of almost $US900 a share.
But, a group of equity analysts at the Bank of Montreal think that Amazon’s best days are still ahead of it and have made the stock a “new top pick.”
In a note sent out to clients on Tuesday, the firm raised its price target for the company’s stock from $US900 to $US1200 per share, above its current price of $US891.51.
The bank attributes its more bullish outlook for Amazon to new estimates about the company’s ability to churn out higher than expected ad revenues.
“We estimate Amazon will generate $US3.5 billion of ad revenue in 2017, growing 63% to $US5.7 billion in 2018,” the bank said.”While no formal consensus estimate exist we believe this is well above expectations of around ~$US1.5 billion in 2017.”
The bank contends that Amazon’s ad business is strong and could be valued at about $US150 billion or $US300 per share.
According to BOM, the majority of Amazon’s revenue from advertising comes from its electronic merchandise or EGM segment.