Citi ups Amazon target to $1,600, calls advertising its next $50B business - InvestingChannel

Citi ups Amazon target to $1,600, calls advertising its next $50B business

Citi analyst Mark May raised his price target for shares of Amazon.com (AMZN) to $1,600 from $1,400 and keeps a Buy rating on the name. The online retailing giant closed Friday up $24.10 to $1,402.05. May’s analysis suggests that Amazon’s total advertising revenue will grow from $10.2B in 2018 to $50.6B in 2028. While Amazon’s ad business is sizable today, it’s quite small relative to the opportunity as few sellers and agencies have yet to develop fully-fledged strategies, May tells investors in a research note titled “Amazon’s Next $50 Billion Business.” The analyst points out that Amazon represents only 4%-5% of the global retail ad market. He estimates that Amazon’s advertising revenue stream is worth $90B or $175 per share on a discounted cash flow model. Amazon’s greater push into advertising could represent a long term risk to Google (GOOG, GOOGL), and potentially Facebook (FB), but likely not a near-term risk, May contends.