On Thursday, CMB International Securities initiated coverage on Amazon.com (NASDAQ:AMZN), assigning the stock a Buy rating and setting a price target (PT) of $213.00. The firm's analysts cited several growth opportunities for the e-commerce giant, including potential in both the US and global markets. They noted that Amazon's e-commerce business is poised for further expansion.
The firm highlighted Amazon Web Services (AWS) as a key driver of future profitability, supported by strong technological capabilities and the advent of generative AI, which presents new opportunities. The analysts also pointed to the continuous improvement in Amazon's retail business efficiency and economies of scale as factors that will contribute to increased profitability.
CMB International Securities mentioned Amazon's regionalization strategy, reduction in cost to serve, and a rising revenue contribution from its platform business as additional elements that will bolster the company's financial performance. They also emphasized the importance of AWS's higher-margin business in driving margin expansion for Amazon over the long term.
The price target of $213.00 is based on an 18.8x multiple of Amazon's estimated 2024 enterprise value to EBITDA (EV/EBITDA), which aligns with the one-year mean. The firm's initiation of a Buy rating reflects their positive outlook on Amazon's ability to grow and expand its margins in the future.
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