Key Moments
- Jefferies says Amazon.com, Inc. is trading at 13x NTM EV/EBITDA, 6 turns below its 10-year average and 8 turns below WMT.
- The firm expects a re-acceleration in Amazon Web Services growth, with backlog potentially rising into the “mid-20s or higher” in the fourth quarter.
- Jefferies reiterates a Buy rating and $300 price target, implying roughly 25% upside from current levels.
Jefferies Argues Amazon Valuation Lags Fundamentals
Investing.com — Amazon shares are trading at levels that Jefferies considers disconnected from the company’s underlying momentum, particularly in its cloud operations, according to a client note from analyst Brent Thill. He contended that the stock’s current valuation does not adequately reflect Amazon’s improving business profile.
Thill highlighted that Amazon “trades at 13x NTM EV/EBITDA, 6 turns below [its] 10-yr avg and 8 turns below WMT.” He added, “We think that’s too cheap at [the] early stage of AWS re-acceleration.”
AWS Positioned for Growth Rebound
Jefferies sees Amazon Web Services as a central catalyst for the stock, describing the cloud unit as “primed for re-acceleration.” The firm expects AWS growth to re-ignite, supported by a strengthening deal pipeline and rising customer demand.
Thill pointed to several factors that he believes could push AWS backlog expansion into “mid-20s or higher” in the fourth quarter. These include what he called the “easiest comp of the year,” an especially strong start to the quarter in terms of bookings, and constructive feedback from industry sources.
According to the note, October bookings alone, bolstered by the $38 billion OpenAI deal, have already “surpassing all of Q3’s deal volume,” underscoring the sharp inflection Jefferies expects in AWS activity. The bank added that AWS revenue should “catch up to backlog growth over time.”
| Metric / Driver | Jefferies View |
|---|---|
| NTM EV/EBITDA multiple | 13x |
| Gap vs 10-year average | 6 turns below |
| Gap vs WMT | 8 turns below |
| AWS backlog growth outlook (Q4) | “mid-20s or higher” |
| OpenAI deal value in October bookings | $38 billion |
| Implied upside from Jefferies target | “25% upside” |
Retail Operations and Consumer Demand Support Outlook
Beyond cloud, Jefferies also underscored the health of Amazon’s retail and logistics ecosystem. The firm pointed to evidence of ongoing consumer resilience and internal execution gains across the company’s retail infrastructure.
Checks reportedly showed “solid ecomm performance, robust cloud strength, and logistics efficiency improvements,” leading Jefferies to characterize fourth-quarter EBIT expectations of about $26 billion as “reasonable.”
Valuation, Peer Discount, and Price Target
Valuation remains a central pillar of Jefferies’ constructive stance on the stock. Thill noted that Amazon trades at a 25% discount to major internet peers and is “well below” its long-term average.
Jefferies’ sum-of-the-parts analysis indicates meaningful room for appreciation, with the firm stating it sees “25% upside” in the shares. Reflecting that view, Jefferies reiterated its Buy rating and maintained a $300 price target on Amazon.
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