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Analysts Say Amazon’s Profit Strategy Could Boost Shares 25 Pct

DATE POSTED:March 15, 2019

Amazon’s recent moves in pushing groceries, closing pop-up stores and zeroing in on advertising could help the online retail giant grow profits, KeyBanc analysts said.

CNBC reported that the analysts lifted Amazon’s price target and they also raised their allocation recommendations to overweight.

The price target for Amazon is now $2,100, which implies a 25 percent gain. By Friday morning, Amazon shares rose 1.1 percent in Friday pre-market trading.

The eCommerce company is “taking a number of operational moves to improve profitability in core retail, which could drive mid-term earnings above the current consensus view. AMZN is pivoting to a company with accelerating profitability,” analysts said.

The analysts specifically pointed to Amazon’s withdrawal of its pop-up kiosks and also a foray into the grocery business, along with its Fresh Pickup service.

Also in play is Amazon Web Services and advertising sector which could potentially boost the company’s margins by $100 billion.

Amazon has been tinkering with its online services, as well.

In February, Amazon launched a video streaming service called Amazon Live. The service features live shows from Amazon’s talent pool and also from brands through an app called the Amazon Live Creator.

Shows on the service operate much like QVC does, with hosts talking about and demonstrating Amazon products. Under the video, customers can view product details and buy things.

Multiple streams run at the same time, so customers can decide which ones fit them best. The service is new, but it’s not the first time Amazon has dabbled in live streaming. About two years ago, it ran a short-lived program called Style Code Live, which was strictly about style and beauty tips.

Amazon even has a web page encouraging brands to stream live, with instructions on how to do it.

“Creating a live stream is easy. First, download the Amazon Live Creator iOS mobile app. Once you have installed the app, you can stream your video content on Amazon.com on desktop, mobile, and Amazon’s mobile app. You can stream directly from your phone camera or through an encoder using a professional camera. Follow these steps and livestream today,” the company said.