According to Morgan Stanley, this tech giant could have upside potential of up to 60%
According to Morgan Stanley, Amazon still has room for improvement as it can bring profits back to pre-pandemic levels. Analyst Brian Nowak rated Amazon a “top pick” and maintained his overweight rating on the stock. He also maintained his $175 price target on the shares, implying a 20.8% increase from Wednesday’s closing price of $144.85. “We believe management is laser-focused on improving efficiency and profitability and demonstrating to investors that their business model can actually deliver ROI after two challenging years,” Nowak wrote in a note Wednesday. “When this ‘efficiency boost’ comes to fruition, our colleague [price/earnings-to-growth] Analysis shows that AMZN shares could be up 20-60% from here. to more than $5. Amazon recently delivered a better-than-expected second quarter with earnings per share of 65 cents, compared to a loss of 20 cents per share last year. Here’s how the analyst believes Amazon can improve its retail profitability: Lower shipping and fulfillment costs per unit through increased square footage and logistics workforce utilization, which Nowak sees as the “biggest efficiency driver” and key driver of higher profitability. Increased discipline around content spending, which analysts say can quickly add billions of dollars in retail profits. Lower markdowns, less inflation and fewer supply chain challenges are potential sources of upside, with the analyst noting that merchandise margins are still below Amazon’s 2018/2019 levels. The analyst said that Amazon could justify a higher price-to-earnings-growth ratio than its tech rivals as the company has greater growth opportunities in multiple business areas such as global retail, cloud, healthcare, etc. and the increasing value of its Prime subscriber base . Shares of the Big Tech company are up 72% this year and hit a new 52-week high on Thursday. The stock has gained around 5% so far in September. —CNBC’s Michael Bloom contributed to this report.
https://www.cnbc.com/2023/09/14/this-one-tech-giant-could-have-up-to-60percent-upside-morgan-stanley-says.html According to Morgan Stanley, this tech giant could have upside potential of up to 60%
