By Sam Boughedda
JPMorgan analyst Doug Anmuth reiterated an Overweight rating and $200 price target on Amazon (NASDAQ:AMZN) in a note Tuesday.
The analyst provided a deep dive on Amazon and the general e-commerce industry, stating that Amazon has a 40% share of US e-commerce, and they think e-commerce can be 40% or more of retail in the long-term.
"US e-commerce gains moderated in 2021, but should re-accelerate in 2H22. Following ~500bps of retail share gain in 2020, US e-comm penetration gains moderated to ~60bps in 2021, bringing US e-comm penetration to 20.8%," said Anmuth. "We believe slower Y/Y penetration gains were driven by B&M retailers re-gaining share into re-opening, & we note e-comm penetration pulled back 2Q-4Q of 2021. Looking forward, e-comm faces macro pressures from ongoing supply chain disruption & a tight labor market, along w/inflation & slowing consumer discretionary spending, all of which could weigh on N-T growth & profitability. However, we project re-acceleration in 2H22 on more favorable comps & as AMZN & other retailers gain share in underpenetrated categories."
Focusing on Amazon, the analyst told investors that its share of US e-commerce increased to 40% in 2021, and it remains the fastest-growing scaled US retailer.
"AMZN’s US GMV reached an estimated $401B in 2021 (+20% Y/Y ex-Whole Foods), driving 40% share of US e-commerce and ~9% of total adj retail sales. Into 2022, we model AMZN US GMV growing +6.6% Y/Y to $428B (ex-Whole Foods). AMZN has gained +650bps of share since 2018, but could take a slight step back in 2022 as B&M retailers scale their omnichannel platforms. Our estimates imply AMZN having ~39% share of US e-comm (-110bbps Y/Y) & 9% (+30bps Y/Y) of US adj retail sales."