Investors should snap up Amazon shares as the e-commerce giant comes within reach of an inflection point, according to Piper Sandler. Analyst Thomas Champion raised his price target on the stock by $10 to $185 per share, implying upside of 36.5% from Wednesday’s close. He also reiterated an overweight rating on Amazon. “We see evidence of this emerging in Gross Margins & 3Q23 incremental Op Income guide was by far the strongest in company history,” he said, noting the company may be “on the cusp of a margin renaissance.” “We think now is the time to buy AMZN with margins inflecting & AWS growth troughing,” Champion added, using the acronym for the company’s cloud business called Amazon Web Services. Champion raised his operating income expectations for 2024 to $48 billion from $38 billion, citing greater confidence in margins. And he said the company’s third-quarter guidance offers more evidence of margin strength. He also pointed to commentary from management around improved customer elasticity from faster delivery. Champion said Street estimates pointing to market share losses in 2024 could be wrong as the company’s investments are creating a better customer service experience. Meanwhile, he said competitors are dealing with shrink issues. And shares can improve with efficiency, Champion said. Ultimately, he called Amazon a “a must-own growth name” for the second half of this year. Shares advanced 1.3% before the bell. Amazon has gained more than 61% this year. — CNBC’s Michael Bloom contributed to this report
