BMO: We're making Amazon a 'new top pick' because exploding revenue in one key business
The e-commerce platform is already one of the largest public companies by market cap ($425.4 billion) and boosts a stock price of almost $900 a share.
But, a group of equity analysts at the Bank of Montreal think that Amazon's best days are still ahead of it and have made the stock a "new top pick."
In a note sent out to clients on Tuesday, the firm raised its price target for the company's stock from $900 to $1200 per share, above its current price of $891.51.
The bank attributes its more bullish outlook for Amazon to new estimates about the company's ability to churn out higher than expected ad revenues.
"We estimate Amazon will generate $3.5 billion of ad revenue in 2017, growing 63% to $5.7 billion in 2018," the bank said."While no formal consensus estimate exist we believe this is well above expectations of around ~$1.5 billion in 2017."
The bank contends that Amazon's ad business is strong and could be valued at about $150 billion or $300 per share.
According to BOM, the majority of Amazon's revenue from advertising comes from its electronic merchandise or EGM segment.
