Almost half of all online shopping will be on Amazon.com this holiday season, cementing Jeff Bezos's commercial grip over one of the most important seasons, according to one analyst.
SunTrust Robinson Humphrey said Amazon's ever-broadening product selection and the popular shift toward online shopping will lead to big profit for the e-commerce giant. In a note to clients, analyst Youssef Squali argued that the current Adobe projections for online sales are too low.
"Adobe is projecting online holiday shopping sales to hit $107.4 billion in the U.S.," wrote Squali in a note to clients. "Given a record breaking Prime Day in 2Q, continued momentum in 3Q, and the fact that this is just the second holiday season offering monthly Prime memberships, we expect a record-breaking holiday season for the company."
Amazon shares fell 0.8 percent in midday Wednesday after the report. Its shares are up 50 percent year to date through Tuesday versus the S&P 500's 15 percent gain.
The analyst has a buy rating on Amazon as well as a price target of $1,270, which is 12 percent above its current price.
Suntrust isn't the only analyst bullish on Amazon. In similar fashion, Morgan Stanley outlined a case for the company to reach a $1 trillion valuation.
Morgan Stanley reiterated its overweight call on Amazon shares, presenting a potential "bull case" with a 12-month price target of $2,000 per share, or roughly a $1 trillion market cap.
"Amazon's high margin [revenue] disclosure speaks to the $1trln ($2,000/sh) sum of parts bull case," Morgan Stanley analyst Brian Nowak wrote in a note to clients Sunday.
While Amazon's ascent to retail monarchy has been the product of years of logistical tailoring, SunTrust's Squali argues that there are multiple reasons why Adobe's Digital Insights numbers may be too low.