Target vs. Amazon: With Return Forecast Of 48%, Amazon Is A Better Bet

Last Updated: 6/29/2024

We Forecast Higher Stock Return For Amazon vs. Its Competitor Target

Target is trading at a cheaper P/S valuation vs. Amazon but it makes sense to pay more for Amazon for a higher return

TGT and AMZN are industry competitors

3-Year Return Depends On [1] Revenue Growth [2] P/S

[1] How Much Can Revenue Grow In Next 3 Years

We forecast annual revenue growth of 1.6% for TGT and 14.5% for AMZN

[2] Which P/S Scenarios Make Sense

We forecast P/S of 0.7 for TGT and 3.4 for AMZN based on below plausible scenarios

Are Current P/S Ratios Justified

A higher P/S is justified by higher margin, higher revenue growth, better margin expansion, and lower risk

P/S Ratio

Revenue Growth & Operating Margin

Financial & Market Risk

Note On P/S Justification

Past Market Return Comparison vs. Benchmarks

Since 2019, Target and Amazon returned 126% and 147% respectively vs. 117% for S&P 500 and 437% for Trefis Multi-Strategy Portfolio

 

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