This week’s third pick is e-commerce and cloud computing giant Amazon (AMZN). In a research note dated July 1, Jefferies analyst Brent Thill reaffirmed a buy rating and increased the Amazon stock price forecast to $255 from $250. Meanwhile, TipRanks’ AI analyst has assigned an “outperform” rating on AMZN stock with a price target of $233.
Thill raised his price target after Jefferies’ proprietary survey of nearly 700 U.S. consumers in mid-/late June indicated that Amazon “remains resilient despite price increases related to tariffs, with stable spend levels and upside if pricing on other websites becomes more expensive.”
The analyst noted that although 80% of the respondents are concerned about prices, the survey reflected a stable spending pattern by most Amazon shoppers (62% spent the same or more in the past three months). However, the survey noted some cost-conscious behavior, as 31% spent less in the past three months.
Thill highlighted that the survey also reflected that Amazon Prime remains the most popular membership and a major loyalty driver for the company. Notably, 73% of respondents reported having a Prime membership, compared to 26% for rival Walmart. He also noted Amazon’s superior positioning on fast and free shipping, selection, and low prices.
The analyst said that given the heightened focus on prices, Amazon’s Prime Day event could turn out to be more popular and impactful by running for four days instead of two (from July 8 to July 11 vs. July 16 to July 17 in 2024) across 20 countries. He expects the event to result in incremental Prime memberships, particularly among students and young adults ages 18 to 24 via six-month extended free trials.
Thill ranks No. 109 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 67% of the time, delivering an average return of 15.2%. See Amazon Insider Trading Activity on TipRanks.