I read a research note from JP Morgan, about Amazon. Their analysts, Doug Anmuth and Bryan Smilek think that Amazon should be trading at $200 per share by year-end. It's at $109.56 now.
They note that US e-commerce rose enormously in 2020 (thanks to Covid lockdowns) but growth slowed a lot in 2021. E-commerce is now 20.8% of all retail, by value. They think that it could re-accelerate in the second half of 2022. I suppose that people will get tired of going to brick-and-mortar shops soon, once the "novelty" of maskless-shopping has worn off?
Their basic thesis is that Amazon only has a 40% share of US e-commerce, a number that could be higher. Also, they think that e-commerce can double in size in years to come. In other words, Amazon retail could be much, much bigger.
Amazon retail will take market share in under-penetrated categories such as groceries, furniture and appliances. Compared to their competitors, their sophisticated warehousing and logistics operations will allow for improved delivery speeds. Finally, their Amazon Prime and third-party reseller programmes will draw in more customers.
They note too, that Amazon shares trades at a 20 times price-to-earnings ratio for just their Amazon Web Services operation, and that you get the retail business for free. What a deal!
Make sure that you own Amazon shares in your portfolio. It will be one of the world's pre-eminent businesses in the decades to come.