- RBC Capital
Markets on Sunday raised its Amazon price target to $3,300 from $2,700 — a 33% increase from where shares traded at Friday's close. - The firm boosted its
Amazon target price after its US online-shopping survey found that the company still dominated the space. - The
coronavirus pandemic has accelerated the shift to e-commerce, RBC said. - Watch Amazon trade live on Markets Insider.
- Read more on Business Insider.
Amazon has a new biggest bull on Wall Street, and it expects the company's online-shopping dominance to lead it higher.
RBC Capital Markets on Sunday raised its Amazon price target to $3,300 from $2,700. The new target — the highest on Wall Street — is about 33% higher than where Amazon shares traded at Friday's close.
Amazon gained as much as 1.4% in early trading on Monday. RBC's new price target applied a 22x target multiple to its adjusted Ebitda estimate of $71 billion for 2022.
RBC's upgrade came after its annual US online-shopping survey again found that Amazon dominated the industry.
"COVID-specific results clearly support the idea that Online Retail is a Structural Winner from the COVID Crisis," a group of analysts led by Mark Mahaney wrote. "And AMZN-specific results clearly support the idea that AMZN is likely the best global play off of Online Retail."
The note said the survey found that during the
Amazon is a clear winner in this boost, according to RBC. This year, 64% of Amazon customers made two or three purchases a month, up from 54% in 2019, the survey found. Prime subscriptions have also boomed, surging to 67% from 59% a year earlier and putting Amazon on track to soon hit 200 million subscriptions worldwide, up from 150 million in January.
"This will be a real long-term benefit as Prime customers are the most loyal Amazon users," Mahaney wrote.
While Amazon is a clear outperformer, RBC also highlighted one negative point gleaned from the survey: Customer satisfaction in the company is at record lows and declining.
In 2020, 64% of Amazon customers surveyed described themselves as "extremely" or "very satisfied," down from 73% a year earlier, the note said. Meanwhile, a record high of 11% of customers said they were "slightly" or "not at all" satisfied.
"The skew is still clearly positive, but the trend is disturbing," Mahaney said, adding, "It could reflect COVID-related delivery delays & unavailability of essential and non-essential items, but we will continue to monitor this."
Amazon has gained roughly 36% year-to-date.