Amazon continues to thrive and benefit from the COVID-19 pandemic because of the high demand for groceries and essentials. Since the coronavirus outbreak, Amazon has seen strong financial results and an overall boost in sales and advertising.
Analysts at Jefferies reiterated their Buy rating on shares of Amazon on Wednesday, with a price target of $3,800. The analysts now value Amazon’s advertising business at $350B which is up from their previous value estimate of $300B for the segment.
The analysts are expecting increased Consumer Packaged Goods (CPG) spending to be a key long-term driver for Amazon’s advertising revenues, and raised their annual sales growth estimates by 2% in 2021 and beyond. Also, the analysts estimate a combined $1T CPG advertising opportunity for AMZN, consisting of $800 billion in trade spending, and 200 billion in advertising.
“According to our survey, 40%/60% of U.S. online shoppers purchased more groceries/essentials on AMZN during