Shares of Amazon.com (AMZN) climbed nearly 1.5%, touching $341.26 and eventually closing at $338.64, following an increase in the price target to $400.00 from $350.00 by the investment and asset management firm Piper Jaffray. In addition, Piper Jaffray analyst Gene Munster reiterated an overweight rating on the stock.
The analyst believes that despite the efforts made by traditional retailers to lure buyers with deep discounts and attractive offers, Amazon will continue to rule the e-Commerce space and retain its share this year.
According to Munster, Amazon’s attempts to kick off its Black Friday online deals earlier than ever before will lead to strong sales growth this year. The e-Commerce behemoth rolled out new deals as often as every ten minutes for eight days starting Nov 21 on everything from electronics to clothing and toys. According to researcher ChannelAdvisor Corp, Amazon’s online sales were up 24% over Black Friday 2013.
To ensure that the sales run smoothly, Amazon is hiring extra workers and even deploying robots to cater to the rising demand and enormous traffic during peak holiday season. According to the Wall Street Journal, the company has hired 80,000 seasonal workers, a 14% increase from the last year.
Additionally, Piper Jaffray remains encouraged by Amazon’s new initiatives, including enhanced AWS offerings and recent expansion into the service sector, allowing customers to locate professionals nearby using their zip code. The analyst believes that these innovative ideas will help the company to retain its e-Commerce market share amid growing competition from traditional retailers.
Amazon.com, one of the largest online retailers in the world, is performing true to form, in our view. It continues to grow revenues and generate strong cash flow quarter upon quarter (discounting seasonal variations).The holiday season is very crucial for the giant e-tailer as sales in November and December account for a major part of its annual revenue.
Amazon shares currently have a Zacks Rank #3 (Hold). Better-ranked stocks in this industry include Mercadolibre, Inc. (MELI), Overstock.com Solutions, Inc. (OSTK), and Geeknet, Inc. (GKNT). All the stocks carry a Zacks Rank #2 (Buy).
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