Amazon’s delivery speed faces increasing competition from its competitors with a fleet of stores

“[W]While Amazon can thrive on its superior logistics network, it will also have to work hard against its competitors who can use their store fleet to meet the immediacy and convenience that customers often need, ”wrote Neil Saunders, Managing Director. General of GlobalData Retail.

See: Jeff Bezos built Amazon into a monolith – but did it hurt American workers?

“The pandemic has intensified the use of these services and we don’t think their popularity will decrease as we move into 2021. It’s also true that Amazon has work to do to improve its own omnichannel credentials; We regret that neither Amazon Books nor Amazon 4 Star stores are properly linked to Amazon’s omnichannel ecosystem. “

Walmart and Target spoke at length about how they were using their stores for services like in-store pickup and curbside delivery, which rose to prominence during COVID-19 as shoppers scouted for ways contactless purchasing products.

According to data from Adobe Inc. ADBE,
-0.82%,
Orders using Online Purchase-In-Store Pickup (BOPIS) increased 40% year over year during the 2020 holiday season, with an average of one in four orders placed using BOPIS when offered.

Experts say that the use of these services will continue even after the end of the pandemic.

Target said in its most recent results that it made 95% of its stores’ vacation sales.

And Walmart just announced that it is strengthening its local fulfillment capabilities with new facilities in the United States.

Also: Target’s holiday sales show importance of stores even as COVID-19 boosts online business

And: Walmart Adds Dozens Of Local Automated Fulfillment Centers To Speed ​​Up Order Delivery And Pickup

Granted, Amazon has a lot to play in its favor, with analysts confident that even with a record quarter under its belt, the e-commerce and cloud services giant has even more growth to come.

“Business trends remain strong and are expected to continue to do so in 2021,” wrote analysts at Susquehanna Financial Group led by Shyam Patil.

Susquehanna rates Amazon’s stock as positive and has raised its price target to $ 5,200 from $ 4,000. This is Amazon’s first stock price target above $ 5,000.

“Ultimately, we see Amazon as a long-term, secular producer whose leadership in its three key markets – e-commerce, cloud and advertising – is expected to emerge even stronger as the pandemic emerges.”

Amazon’s advertising business, which appears as “other” on the company’s balance sheet, increased 66% in the fourth quarter.

Even though the competition has a ton of stores, Truist Securities highlights Amazon’s extremely high logistics standards.

“A stronger than expected holiday season for retail has provided Amazon with the perfect opportunity to evolve its superior ecommerce model and achieve revenue growth not seen since 2011, with record profits,” said writes Truist analysts.

“We believe these gains will prove to be persistent after COVID-19, with aggressive infrastructure investments and product deployments likely to further extend the company’s lead.”

Truist is pricing the purchase of Amazon shares with a target price of $ 3,750.

“We believe Amazon is well positioned as a market leader in e-commerce and public cloud, where secular changes remain early – U.S. e-commerce accounts for about 20% of adjusted retail sales, and we estimate that around 15% of workloads are in the cloud today, ”JPMorgan wrote in a note.

“Amazon is also starting to show more profits, with its high-growth AWS and ad revenue streams also the most profitable.”

JPMorgan assesses the overweight position in Amazon stocks with a price target of $ 4,400, down from $ 4,155.

Amazon stock has gained nearly 70% over the past year.
+ 2.60%
is up 149.6% over the period. And the SPX S&P 500 index,
+ 0.37%
gained 18.1% over the period.