Amazon stock price has been rallying at a robust pace over the past couple of months amid consumer’s shift towards online platforms due to social distancing policies to avoid the spread of coronavirus. The market analysts forecast that exceptionally strong demand for the e-commerce giant is likely to extend into the second half of the year.
Jeffries has lifted the price target to $3100 on higher demand, tagging it as the best stock pick in the online sector. Wells Fargo also came up with a similar stance, raising the price target to $3,000 from the previous target of $2,725.
“While we note ramping local fulfillment capabilities and exceptionally strong e-commerce data from omnichannel retail competitors, we nonetheless expect that AMZN is likely to benefit from exceptionally strong e-commerce demand in 2Q, likely extending into 2H20,” analyst Brian Fitzgerald said.
Amazon stock soared more than 44% in the past three months to the highest level of $2600. Despite the recent run, the higher price targets from market analysts indicate further upside for the retail giant. Its market capitalization also reached an all-time high of $1.30 trillion.
The company has generated net sales of $75.5 billion in the latest quarter, up 26% year over year. However, the market analysts are anticipating substantial revenue growth for the second quarter and the rest of the year. Amazon expects second-quarter revenue in the range of $81.0 billion.
Moreover, the company appears in a strong cash position to invest in growth opportunities. It has generated an operating cash flow of $39.7 billion in the latest quarter.
“From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” said Jeff Bezos, Amazon founder, and CEO