Bespoke's criteria for the "Death by Amazon" index was that the components must be direct retailers with limited online presence, or their core business is based on physical retailing locations, and they must rely on third-party brands. The retailers also had to be a member of the retail industry of the S&P 1500 index, or a member of the S&P retail select index.
Hickey said Amazon shares could continue their advance. "You would expect this even though the stock is extremely expensive from traditional metrics. It just keeps stealing share from its brick-and-mortar peers," he said. As for traditional retailers, many are seeing weakening sales and store closures.
"We've seen it in the retail sales data that comes out every month. First it was taking share from the electronics, and the electronics section of retail sales was losing share. Then we saw general merchandise start to lose share, and that started to lose when you saw the popularity of Amazon Prime increase," he said. "The next sector would be apparel … I think over time, that's going to be another area where they're going to start eating into share."
Among the stocks included in the index are big chains like Wal-Mart, Target, Macy's, Costco and TJX Cos. There are also Foot Locker, Williams-Sonoma, CVS, Gamestop, Cabela's, and Barnes and Noble. Bespoke pointed out in a note earlier this week that Amazon's two-year return was 106 percent, and only one company on the list surpassed it — Burlington Stores, up 135 percent.
Among the worst performers were Conn's, off 83 percent; Stage Stores, off 70 percent, and Sears Holdings, off 62 percent. Macy's was down 38 percent, Nordstrom, off 32 percent, while Wal-Mart was down about 4 percent.
Off-price and discount merchants are clearly the types of retailers that have done the best, but only 15 of the 54 companies in the overall index have had positive returns over the past two years. After Burlington, the next best performers were Dollar Tree, up about 75 percent in the two years, and Dollar General, up 67 percent. Off-price retailer TJX rose almost 50 percent, while Costco was up 43 percent.
Goldman Sachs upped its target on Amazon stock on Thursday, even though it expects Amazon sales to be slightly short of Wall Street estimates when it reports results Tuesday. It raised its 12-month price target to $900 from $790. Amazon stock was flat Thursday afternoon, at just about $745.
Goldman analysts said at 18 times 2017 estimated cash earnings per share, they believe the "risk/reward remains favorable as investments in web services, infrastructure, and logistics should result in additional share gains, cash flow growth, and continued high returns on investment."
Goldman forecasts second quarter revenue of $29.4 billion, below the $29.5 billion expected in the consensus forecast. Goldman sees the company's investment in infrastructure, as well as its moves to decrease delivery times while boosting order frequency, as spurring some of the gains. Goldman also expects adjusted operating income of $1.74 billion, implying margins of 5.9 percent. Goldman's operating income estimate tops the Wall Street consensus of $1.68 billion. Goldman also expects further margin improvement this year.