The Zhitong Finance App learned that after weighing the impact of the relevant layoff measures of e-commerce giant Amazon (AMZN.US), Morgan Stanley still insisted on including Amazon in the agency's “Top Stock Pick” (Top Stock Pick) list and set a target of 150 US dollars for the stock.

Daimo analyst Brian Nowak and his team believe that most of the 9,000 employees recently fired are from the AWS business and Amazon's advertising department. They expect that the reduced mix of employees in these fields will lead to a higher “average savings per employee”, which will ultimately boost Amazon's profit margin level. Analyst Nowak and his team anticipate that the additional annual savings of 2.2 billion US dollars will increase Amazon's 2024 EBIT profit forecast to 37.2 billion US dollars.

Daimo uses the EV/EBIT multiplier and partial summation model to calculate Amazon's valuation. In the end, the $150 target price given by Daimo represents about 50% of the stock's potential upside, which also means that the valuation multiplier under the new 2024 EBIT target benchmark is about 39X, which is about 30% lower than Amazon's long-term average EV/EBIT multiplier.

So far this year, Amazon's stock price has risen more than 16%, but it is still more than 40% lower than the 52-week high of $170.83.