Amazon Remains 'Best Idea,' Analyst Says: Expect US E-Commerce Penetration To Double Over 40%

Benzinga ·  Feb 22 05:40

Amazon (NASDAQ:AMZN) is the "Best Idea" for long-term investment and poised to lead the evolving e-commerce arena, according to JPMorgan analyst Doug Anmuth.

What Happened: Anmuth predicts a potential doubling of U.S. e-commerce penetration to over 40%.

The recently released fourth-quarter (Q4) U.S. e-commerce spending data showcases a commendable +7.2% YoY growth. This underlines the stability of online growth trends.

The analysis highlights the significant upward trajectory of U.S. e-commerce penetration, reaching 23.3% of Adjusted Retail Sales in 4Q — an +84bps year-over-year increase for the sixth consecutive quarter.

Also Read: Record Online Holiday Spending Driven By Deep Discounts And 'Buy Now, Pay Later' Deals

According to Anmuth, Amazon demonstrated its prowess with a share of 46.4% in Q4. The company achieved year-over-year share gains exceeding 100bps for the sixth consecutive quarter. Record-breaking events solidify Amazon's position as an industry leader.

Anmuth anticipates an acceleration in e-commerce growth for Amazon in 2024, projecting a +8.1% year-over-year growth. Hence, in 2023, Amazon outperformed the industry's +7.6% year-over-year growth.

Fueled by growth in under-penetrated categories, Amazon now aims to increase its share of Adjusted Retail Sales to 22.9% in 2024 — an +112bps year-over-year rise.

The 'Best Idea'

Anmuth also emphasized Amazon as the 'Best Idea' for long-term investment. He highlighted the company's resilience, strategic focus, and innovative endeavors in this regard.

Beyond traditional e-commerce, he underscored Amazon's foray into connected TV, aligning with broader streaming trends for sustained growth and future revenue streams, as catalysts for growth.

JPMorgan sees a future brimming with opportunities in U.S. e-commerce, with Amazon leading the charge.

As e-commerce penetration gears up for a potential double to more than 40%+, Amazon's strategic positioning and robust performance make it the quintessential 'Best Idea' for investors eyeing long-term success.

Read Next: Amazon's Dow Inclusion: Will It Mirror Apple, Microsoft, Intel With A Stock Anchor Or Signal An Upward Spike?

Image: Shutterstock

The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
    Write a comment