Amazon’s focus on boosting profits could raise shares by 25%, KeyBanc analysts say

Closing pop-up stores, pushing the grocery business and focusing on advertising all will help Amazon boost profits, KeyBanc analysts said as they boosted the online retailer’s price target.

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The KeyBanc analysts raised their recommended allocation on Amazon to overweight and boosted the price target to $2,100, implying nearly a 25 percent gain from Thursday’s close. Shares rose about 1.1 percent in premarket trading Friday.

The company « is taking a number of operational moves to improve profitability in core retail, which could drive mid-term earnings above the current consensus view. AMZN is pivoting to a company with accelerating profitability. »

Specifically, the analyst team, led by Edward Yruma, pointed to Amazon’s decision to shutter its pop-up kiosks used to sell hardware products. Yruma also cited potential in the mid-market grocery business and Fresh Pickup service.

Finally, Amazon Web Services and advertising could boost margins by $100 billion and lead to significant margin expansion, the analysts said.

Source: CNBC

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