Amazon Stock May Be Headed to $1,800

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An analyst projects that Amazon stock will hit $1,800 in the next 12 to 18 months. (Reed Saxon/AP)

Expectations are high heading into the Amazon.com, Inc. (Nasdaq: AMZN) fourth-quarter earnings report due out Feb. 1. On Thursday, D.A. Davidson set the expectations bar for Amazon stock higher than any other firm on Wall Street.

D.A. Davidson analyst Tom Forte has reiterated his “buy” rating and raised his 12- to 18-month price target for Amazon from $1,500 to $1,800, the highest price target among 42 analysts who cover the stock, according to FactSet. Forte also has a five-year price target of $2,450 for Amazon, suggesting more than 80 percent of upside in the longer term.

Forte said Amazon’s Whole Foods is a tremendous growth opportunity that is not just about groceries.

“We see Amazon’s efforts at Whole Foods as iterative with the long-term goal of maximizing its grocery sales and leveraging an increased physical store presence to generate more online sales too,” Forte says. “We look for the integration of Amazon Lockers and other efforts to enable consumers to pick up and return online purchases at its locations.”

In addition, Forte says Amazon will likely integrate the technology that powers its newly opened cashier-less Amazon Go stores into Whole Foods locations. The move will help Amazon manage labor costs and give the company more wiggle room on prices.

In the near term, D.A. Davidson is expecting fourth-quarter earnings per share of $1.78, slightly below consensus estimates of $1.84. However, the firm is calling for $60.53 billion in revenue compared to consensus estimates of $59.98 billion.

Forte says he will be listening closely to Amazon’s earnings call for updates on the transformation of Whole Foods, increasing competition from Wal-Mart Stores (WMT) and Amazon’s ongoing search for a second headquarters location.

Forte might be the most bullish Amazon analyst out there, but he’s certainly not the only one with high hopes for Amazon’s fourth quarter. GBH Insights head of technology research Daniel Ives says Amazon’s earnings report will once again demonstrate the company is pulling all the right levers.

“We expect strength from Amazon across the board this quarter as our analysis indicates a better than performance on the North America retail channel as well on the AWS front, which should translate into 3 to 5 percent top-line upside for 4Q in our opinion,” Ives says.

GBH has a “highly attractive” rating and $1,500 price target for AMZN stock.

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