Actions of Amazon.com (NASDAQ: AMZN) jumped 3.3% on Friday after retail sales surged unexpectedly in September.
Sales increased 0.7% sequentially and 13.9% year-on-year. Analysts had planned a sequence decline 0.2%.
There were growing concerns that the stubbornly high number of COVID-19 cases, the end of improved unemployment benefits and supply chain bottlenecks would conspire to weaken the recovery of the retail sector. But consumers have been surprisingly resilient, and retailers have weathered their supply chain challenges better than Wall Street expected.
As the largest e-commerce company and the second-largest retailer (by sales) in the United States, Amazon is expected to benefit from these sales trends as it enters the all-important holiday shopping season.
The good news supports a recent wave of optimism about Amazon’s near-term outlook. JP Morgan Analyst Doug Anmuth estimates shares of the online retail giant are set to climb more than 20% to $ 4,100 in the coming year, fueled in part by higher prices Amazon Prime which could increase its profits by up to 15%.
Cowen Analyst John Blackledge is also bullish on Amazon stocks. He believes the stock could climb to $ 4,300, in part thanks to the affinity of young consumers for his brand. Cowen’s survey of Millennial buyers and their next demographic, Gen Z, showed that Amazon “is now the best place for consumers to start a product search, to research a product before a product. online or in-store purchase, and the main platform to complete the purchase, âaccording to Blackledge.
Together, Prime’s pricing power and Amazon’s leadership position among younger consumers are expected to help increase the e-commerce titan’s profits – and, by extension, its share price – in the years to come. .
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