Amazon shares will reach $3,000 in 2 years without the company really trying, Piper Jaffray says

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Founder, Chairman, CEO and President of Amazon Jeff Bezos gives a thumbs up as he speaks during an event about Blue Origin’s space exploration plans in Washington, U.S., May 9, 2019.

Clodagh Kilcoyne | Reuters

Amazon shares will rally to $3,000 in about two years, making them worth nearly $1.5 trillion, without the company doing much differently than it is doing today, Piper Jaffray told clients on Friday.

“We believe AMZN shares will reach $3,000 by sometime between mid-’21 and mid-’22 or within 24-36 months,” said analyst Michael Olson in a note. “We have a high degree of confidence that AMZN shares can reach this level with no major acquisitions or other significant changes to the business.”

Olson also noted that he’s assuming decelerating growth in all major Amazon business lines and applying conservative multiples and still comes to this eye-popping conclusion. Using a sum-of-the-parts analysis, the analyst finds the retail side of Amazon’s business is cheap.

“Adjusting for the value of the AWS segment and Advertising (within “Other”), the company’s core retail segment is trading at a level that implies that business is valued below a traditional brick & mortar multiple of sales,” the note states.

Piper’s official 12-month price target is $2,225 and it rates the stock overweight. A rally to $3,000 would mean a gain of 65% from here.

Amazon shares are up 20% this year and 86% the last two years. The stock is, however, off 11% from its all-time high which put its worth at more than $1 trillion.

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