Cowen's internet analyst calls Amazon his best idea for 2019, sees a 40% gain

  • Cowen's 12-month price target for Amazon is $2,250, a 37 percent gain from Friday's close.
  • "Amazon has several drivers that should yield robust global revenue growth with rising margins the next several years," Cowen's John Blackledge says.
REUTERS/Pascal Rossignol

Cowen's internet analyst says Amazon is his best idea for 2019 because multiple opportunities will generate solid revenue and margin growth in the coming years including internationally, in the cloud business and advertising.

Amazon will post 17 percent annual revenue growth the next five years, Cowen's John Blackledge predicts in a note on Tuesday, and that will keep the share price moving higher. His 12-month price target for Amazon at $2,250 would translate into a gain of 37 percent.

"Amazon has several drivers that should yield robust global revenue growth with rising margins the next several years, namely further B2C e-commerce market share gains in large retail verticals, emerging e-commerce verticals like B2B, and significant opportunity in existing and newer markets ... like India, Mexico, and Australia," Blackledge said.

Amazon shares have fallen from their highs earlier this year that brought the company to a $1 trillion valuation. The e-commerce giant, now worth $802.4 billion, saw its shares surge more than 40 percent in 2018.

"Amazon Web Services should enjoy years of secular tailwinds driving revenue CAGR of 31 percent from 2019 to 2024 as workloads migrate to the Cloud," Blackledge added. "Amazon's advertising, while still nascent, will drive both revenue growth and margin opportunity."

Amazon stock was little changed at $1,643.24 per share on Tuesday.

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