Amazon.com Inc. (AMZN) may almost double in value by 2023, say analysts at Morgan Stanley. An investment bank Morgan Stanley released a brief policy Monday, May 17, discussing how it sees one of Amazon’s largest online retailers in the future. Experts at the bank predict that Amazon’s shares will be worth about $ 6,000 in only two years. This represents an increase of about 80 % over the current price.
The Morgan Stanley thesis is created using the PEG ratio (stock price versus earnings per share versus expected future earnings) of Amazon and other retailers. Amazon’s PEG is about 1.2, while those of such companies typically hover around 3. The stock price of Amazon must be between $ 5,000 and $ 6,000 to be comparable to that of similar companies. In Morgan Stanley’s opinion, Amazon may grow significantly in the coming years.
It is worth noting that Amazon posted record earnings for the first quarter of more than $8 billion. The majority of revenue still comes from direct selling, but the company expands its marketplace and services for third-party sellers. Consequently, about 55 % of goods sold through Amazon were from third-party sellers in the first quarter. The company enjoys a broad client base, high traffic, and a developed logistics network and has virtually no direct competitors.
The digital advertising sector plays an equally important role in driving growth. The Amazon.com Inc. (NASDAQ: AMZN) Advertising Network is the third-largest online advertising platform after Alphabet and Facebook. Further, the cloud computing industry is multiplying. This diversification enables Amazon to remain robust under a wide range of economic conditions.
The stock of Amazon.com Inc. (AMZN) ended last trading session at $3232.28, down 1.17%. The trading volume was 2.83 million shares, below the average daily volume of 3.67 million shares for the last 50 days. Amazon.com Inc. shares have gained 0.26% in the last five days; however, they have lost 4.14% over the last month. Over the last three months, the stock price has lost 2.31% and has lost 0.76% this year. Further, the stock is trading at a price-to-earnings ratio of 61.51. In the meantime, its price to sales ratio stands at 3.82, while its cash flow ratio is 73.40.