Amazon, MercadoLibre and Sea feature in Morgan Stanley's bullish thesis on global e-commerce
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Morgan Stanley defends global e-commerce stocks after the sector has been de-rated. The firm said it sees a disconnect that is supported by its proprietary industry model.
The MS analysts team believes the COVID-related bump will not flatten the future e-commerce penetration curve.
"While stay-at-home trends were a driver of outsized growth in 2019-21, we see a stronger-for-longer setup of a double-digit CAGR through 2026."
The firm also highlighted a significant five-year growth opportunity for e-commerce in less-penetrated emerging markets.
The key sector stock calls from the firm include Amazon (NASDAQ:AMZN
-1.6%), MercadoLibre (NASDAQ:MELI
-2.9%) and Sea Limited (NYSE:SE
-7.0%). All three are rated solidly at Overweight.
Amazon's (AMZN) high-margin businesses are said to continue to allow the company to drive greater profitability while it still continues to invest in key initiatives like last mile delivery, fulfillment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India and AWS with cloud adoption hitting an inflection point. Meanwhile, MercadoLibre (MELI) is considered a strategic pure-play option to one of the faster-growing regions within the Morgan Stanley global e-commerce model. Sea Ltd. (SEA) gets the nod due to the strong growth potential for Shopee.
Farfetch Limited (FTCH
-4.8%) and JD.com (JD
-5.1%) are also rated at Overweight by Morgan Stanley.
Amazon (AMZN) has the highest Seeking Alpha Quant Rating of all the e-commerce names.