Amazon (NASDAQ:AMZN) stands to benefit significantly from the holiday season – a chilly period when shopping trends heat up. This time of year represents a boom for commerce, and few companies are better positioned to capitalize on it than Amazon.
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In fact, Truist analyst Youssef Squali thinks that the ecommerce giant is one of the “best-positioned ecommerce marketplaces under coverage to capture share gains this Holiday Season.”
The company got an early start to the season with its Prime Big Deal Days on October 8-9, which marked the most successful event in its three-year history. As the Holiday Season progresses, Squali believes the company is “well-positioned to drive growth” during the “all-important” Cyber-5 period (Thanksgiving through Cyber Monday), supported by an expanded product selection, faster delivery speeds, and competitive pricing in a “highly promotional environment.” Squali’s take is based on various industry estimates for holiday sales growth that generally align with e-commerce growth expectations of 7-9% year-over-year.
Squali’s Q4 projections have North America sales growing 8.7% y/y, which is at the higher end of industry expectations, while Street estimates stand at 8.5% y/y. “This is based on our Truist Card Data and reflects a resilient consumer, a superior value proposition and sustained growth in ad revenue and AWS,” the analyst explained. “This growth should also support elevated margins even as AMZN invests aggressively in AI, AWS, logistics and Project Kuiper.”
On top of its extensive selection of more than 600 million products available on its marketplace (per AMZScout), Amazon has introduced a new discount offering, Amazon Haul. This platform focuses on affordable goods priced at $20 or less, positioning Amazon to compete directly with platforms like Temu and Shein. Currently available to U.S. customers via the app and mobile site, Amazon Haul features longer delivery times of 1-2 weeks, with orders not eligible for Prime benefits. While Squali thinks the new offering may not significantly impact Amazon’s financials in the short term, it broadens the selection, which should “improve order frequency, customer retention and LTV over time.”
Summing up, Squali takes a highly bullish stance here. “AMZN is our favorite mega cap going into 2025 as it continues to improve its value proposition for merchants and shoppers, and be one of the best ways to play Cloud, AI, digital ads and global logistics,” he said.
Bottom line, Squali rates Amazon shares a Buy, while his $270 price target implies ~37% gains over the next year. (To watch Squali’s track record, click here)
Some stocks earn Wall Street’s favor, and AMZN is a clear example, boasting 44 Buy ratings and just one Hold, contributing to its Strong Buy consensus. Currently trading at $201.45, the stock has an average price target of $239.10, suggesting ~19% upside potential over the next 12 months. (See Amazon stock ratings)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
