Bernstein has raised its price target on Amazon.com Inc (NASDAQ:AMZN) over expectations of strong long-term growth driven by operational efficiency and sustained momentum across its business segments.
The brokerage raised the target to $265 from the previous $235, maintaining an “Outperform” rating.
Key factors supporting this growth include robust performances in its core retail business, AWS, and advertising operations. The firm also increased its 2026 EBIT estimate to $99.6 billion, factoring in cost-efficiency improvements, analysts said.
Amazon’s cost management initiatives, particularly its focus on lowering inbound fees and enhancing seller adoption, are seen as margin accretive, the brokerage said.
Bernstein projects operating margins will rise to 11.4% by 2025, supported by increasing efficiencies across retail operations and a strong outlook for AWS. Advertising revenue is another bright spot, with Bernstein expecting it to grow at ~20% annually due to its high margins and scalability.
While Amazon’s stock has gained 55% year-to-date, it continues to trade below historical averages on a forward EV/EBIT basis, indicating potential for further re-rating.
Overall, Bernstein’s bullish outlook for Amazon is grounded in its ability to capitalize on efficiencies while driving long-term growth across its business segments, making it a compelling investment opportunity for 2025.
