It might have been one of the most controversial things that Amazon (NASDAQ:AMZN) has done recently. The move to add advertising to its Amazon Prime streaming platform has enraged some and left others feeling pretty good. An analyst weighed in on the move and approved of the strategy. But that wasn’t enough to keep Amazon stock from sliding fractionally in Wednesday afternoon’s trading session.
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Word from Barclays, via analyst Justin Post, makes it clear that Barclays likes what it sees out of the new move and expects it to go well. In fact, Post and his team look for Amazon to post improved revenues and improved margins, thanks to the addition of ads and a higher-pay tier to get rid of said ads. That was enough for Post and the team to hold on to a Buy rating for Amazon and a price target of $168 per share.
The Rest is a Mixed Bag
That’s good news for Amazon, certainly, but the rest of the developments aren’t exactly so clear-cut. In fact, it’s not clear-cut that Amazon won’t lose a lot of streamers to these new price hikes and forced ad-tier subscriptions. But that’s where things get interesting. Amazon is still working on its Woodburn distribution center, a 3.5 million square foot operation that will be opening soon once it gets the robotics properly set up. It’s a little behind schedule—almost a year late—but it will likely end up being the biggest building in Oregon once it’s all said and done.
Meanwhile, Amazon sellers—who have been building small businesses on the platform for years—are looking into legal options in the face of a recent crackdown on the platform. Just four e-commerce law firms are apparently handling as many as several thousand cases a year. That could represent a real opportunity for another platform to swoop in and land some sellers.
Is Amazon a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 42 Buys assigned in the past three months, as indicated by the graphic below. After a 75.06% rally in its share price over the past year, the average AMZN price target of $182.28 per share implies 22.21% upside potential.
