Black Friday is coming up in just two weeks, marking the start of this year’s holiday shopping season, and the experts are already trying to predict what retailers can expect from ‘the American consumer’. Will 70-inch flat screen TVs run out the door at loss-leader prices? How will Apple’s iPhones hold up? Will an important past trend continue, with buyers continuing to migrate toward online retailers?
That last may be key. Brick-and-mortar retail has been feeling a hurt from online competition for years now and there is no sign that this trend will falter. The biggest questions are, how long will traditional stores hold out, and how will the market divvy up in the end?
Let’s take a closer look:
First off the Blocks
Jeff Bezos’ company is the 800-pound gorilla the online retail room. With a $795B market cap, Amazon.com, Inc. (AMZN – Research Report) has the third largest cash holdings of any publicly traded company; in fact, it touched the $1 trillion mark earlier this year. What started out as an online book store 22 years ago is now a retail behemoth selling almost anything you can think of – and delivering it right to your door.
Such size has a quality all its own, and Amazon helps to prove that. The share price stands above $1,600 and is commanding an optimistic outlook, despite losing 24% since September and whiffing slightly on the Q3 earnings report. AMZN holds a whopping 33 ‘Buy’ ratings and stands near the top of TipRanks ‘Most Recommended’ stocks. Checking with the analysts gives us some idea why now may be the right time to acquire Amazon.
Ronald Josey (Track Record & Ratings) of JMP Securities forthrightly acknowledged the underwhelming Q3 report, but noted that company remains strong: “While we acknowledge the concerns post earnings around decelerating revenue and unit growth, we highlight significantly improving profitability and the continued potential across all of Amazon’s initiatives…” He set a $2,050 price target, giving a 26% upside forecast.
