Could Amazon reach $325 a share?
Founder Jeff Bezos has been called 'the Sam Walton of our time.'
Shares of the online retailer could reach $325 -- or about 23% higher than its current trading price, according to the investment firm. Others agree with Morgan Stanley's assessment, with investor and commentator Jim Cramer calling Amazon founder Jeff Bezos "the Sam Walton of our time."
Walton, the founder of Wal-Mart (WMT), created the world's largest retailer by cutting margins and seeking to drive profits through volume, as well as using technology and inventory control to gain an edge. Today, Wal-Mart has a market capitalization of $229 billion.
Amazon -- valued at $120 billion by the stock market -- is expanding its warehouses and announced 19 new fulfillment centers in the third-quarter alone.
"When you decide that you want to take over a core business, which is the fulfillment for everybody else who is trying to do online [sales], you see why they've spent so much building these warehouses everywhere," Cramer said in this video. They "are the backbone for all Internet shopping."Cramer, who said he agrees with the $325 price target from Morgan Stanley, noted that the price-to-earnings ratio for Amazon is "absurd," yet he added, "It's the only stock I use without looking at the P/E multiple."
Wal-Mart has a current price-to-earnings ratio of 14, while Amazon's is currently 501, according to data from Bloomberg. The online retailer had a healthy run last year, with its stock jumping nearly 44% in 2012.
So far, Morgan Stanley's call hasn't had the same effect on Amazon's stock price as the infamous 1998 $400 price target from former analyst Henry Blodget, who saw the stock zoom to his target in just over three weeks.
"There are so many ways to win here," Cramer said. He added that it "looks like they've really crushed the Nook with the Kindle, and also Amazon Prime represents such a great value. There was a thought about when sales taxes were about to go up in many states that that would hurt Amazon, but apparently it hasn't."
More on Money Now
When will companies learn to stick to their product and stay out of politics?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market finished the Tuesday session on an upbeat note with small caps pacing the rally. The Russell 2000 advanced 0.8%, while the S&P 500 added 0.5% with eight sectors ending in the green.
Although geopolitical concerns factored into the modest retreat on Monday, the worries were cast aside today after separatist forces in eastern Ukraine handed over black boxes from MH17 to Malaysian authorities and Secretary of State John Kerry began working on brokering a ... More
More Market News
The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'