Jefferies lifted its price target on Amazon.com Inc. shares to $150 from $135 on Wednesday. “We believe upside to consensus combined with positive sentiment from AI will help AMZN shares to re-rate,” said a team of analysts led by Brent Thill. Jefferies’ full-year 2024 forecast for earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of a company’s health, is 8% higher than consensus. The analysts credited the 50% year-to-date rise in Amazon’s share price to improved profitability, an expected recovery for its Amazon Web Services (AWS) cloud platform and benefits from AI tailwinds. “We see AMZN as a core beneficiary from the rise of AI as AWS benefits from increased usage to train and run AI models. While AMZN lags its mega-cap peers in generative AI capabilities today, the AI opportunity remains early, and we expect AMZN’s rich history of innovation will help them close the AI gap over time,” said Thill and the team. Amazon shares trade at 13 times EBITDA, a roughly 25% discount to the 10-year average of 18.5 times, making them “attractively valued,” said the analysts. And the stock is up just 47% over the last 5-years, meaning the e-commerce giant is a “significant laggard” for that time period compared to other mega-cap peers, they said.
