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LivestreamMenuAmazon stock isn’t necessarily cheap, but it offers a much less expensive way to gain exposure to the artificial intelligence data center and retail investment themes than Walmart and Alphabet , according to Jefferies. The investment firm has a buy rating on the e-commerce giant. It also has a $320 price target on shares, implying 29% upside from Tuesday’s close. The stock was trading 3% higher on Wednesday in the wake of Jefferies’ call. Amazon has an enterprise value to earnings before interest, taxes, depreciation and amortization multiple of roughly 12, making it cheaper than comparable retail and technology plays, Jefferies said. “At ~12x [next 12 months] EV/EBITDA, AMZN trades at [a one-third] … discount to 18x blended GOOGL 17x / WMT 19x and is a top pick among hyperscalers,” analyst Brent Thill said Monday in a note to clients. Amazon is both the largest retail competitor to Walmart and its most comparable rival in the cloud technology industry. The analyst added that now is a particularly good time to add shares of Amazon to one’s portfolio. The stock’s price is up modestly over the past three months, “only cheapen[ing] an already attractive entry,” Thill wrote. He also noted that Amazon should soon get a boost from its AI-linked data center plans, particularly if it raises its capital expenditure guidance this year. “Our expert called the current buildout unprecedented & believes [estimates of Amazon’s capital expenditure and free-cash flow for the full year] … may still be understated,” Thill said in his note. Of the 69 analysts covering Amazon, 65 have buy or strong buy rating on the stock, while four have a hold on it, LSEG data shows. Shares have risen 13% year to date, underperforming the S & P 500’s 21% gain over the same period.Read More
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