Amazon touted as ‘favorite name by a wide margin’ at J.P. Morgan
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Amazon.com, Inc. (NASDAQ:AMZN) shares marked a strong gain in Tuesdayâs premarket trading after J.P. Morgan offered a bullish take on the stock.
The bankâs analyst explained that while the stock is by no means unpopular and is widely owned, concerns on retail spending and AWS growth have hampered the stock as of late. Shrinking margins across the retail space have also hung over the stock. However, J.P. Morgan voiced its belief that Amazon (AMZN) will continue to outperform even in an adverse operating environment.
âWe continue to think higher in-stock levels and faster delivery speeds will be key drivers as Prime returns to normal,â a research note released on Tuesday explained. âWe expect Amazon (AMZN) to have an inventory advantage this holiday season as omni-channel retailers may be more constrained by physical space and Amazon also has the benefit of [third party sellers].â
The analysis also expects a return to mid-single margins for the retail business as lower freight and fuel costs relative to the first half of 2022 add a tailwind. 
âAmazon remains our best idea as we continue to expect year over year revenue acceleration, margin expansion, and capex moderation (all led by retail) to drive significant FCF inflection in 2023,â the team concluded. 
Shares of Amazon (AMZN) rose 2.92% in premarket trading on Tuesday.
Read more on M&A targets rumored to be in Amazonâs crosshairs.