Ten analysts now predict Amazon’s shares will eclipse the $1,000 mark in the next year, and 13 others have price targets within 5% of that goal. Since I follow the company, I will be putting out my price recommendation in the next couple weeks.
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Amazon is now the fourth-largest company in the S&P 500 by market cap, ranking behind only Apple, Microsoft and Google parent Alphabet. Its stock price is now setting new all-time highs above the $900 mark. Incidentally, after adjusting for stock splits, that $400 target on Amazon in 1998 equates to about $67 today.
Amazon’s soaring market value—up more than 50% in the past 12 months to more than $430 billion—allows founder and CEO Jeff Bezos to sell about $1 billion of his shares each year to fund his space exploration venture. But that hasn’t stopped Wall Street from seeing the stars. Ten analysts now predict Amazon’s shares will eclipse the $1,000 mark in the next year, and 13 others have price targets within 5% of that goal, according to S&P Global Market Intelligence.
Still, Amazon today isn’t quite the Amazon of old, trying to survive on razor-thin retail margins. Its fast-growing Web-services business has altered the company’s earnings and cash flow dramatically, as have other offerings. Brian Nowak of Morgan Stanley estimates that Amazon’s Prime membership, advertising and credit card programs generated about $9.3 billion in revenue last year and will grow to about $12.7 billion this year—all with a combined operating margin of around 70%. Helpful, as Amazon still needs all the fuel it can get.
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