Amazon This Week Lost Its Last Bear Among Wall Street Analysts

(Bloomberg) -- Amazon.com Inc.'s last bear has given up.

Allen Gillespie came into this week the only one of 55 financial analysts tracked by Bloomberg with a “sell” rating on the company's shares. In a note to clients on Tuesday, he upgraded the retail and technology giant to “hold.”

His was a decidedly contrarian bet: The shares have gained about 80% since Gillespie recommended selling them back in 2017.

Still, the analyst, president of FinTrust Investment Advisory Services LLC, isn't exactly upbeat on Amazon's prospects. His target price, $1,611, remains the lowest on Wall Street and some 13% below where Amazon shares were trading on Friday morning.

Gillespie -- who tries to check the value of stocks by gauging their worth in Bitcoin and gold, as well as dollars -- says Amazon's value has slipped compared with the cryptocurrency.

But in an environment of declining interest rates, investors are likely to continue piling into well-liked stocks like Amazon, he said. So, hold it is.

As for Amazon's businesses, Gillespie says other analysts are too optimistic. Amazon is investing more than observers believe, he said. And cloud computing isn't proving as lucrative as investors think. “There are some embedded assumptions in people's models that are probably more aggressive than is called for,” he said.

Gillespie, who started following Amazon with a sell recommendation in July 2017, has an eclectic coverage area. Most analysts specialize in a sector -- Amazon's watchers are often retail or internet experts. Gillespie follows Amazon, some financial companies, an exchange-traded fund and a 3D printing company. His aim isn't to track Amazon quarter-to-quarter, he said. “We put pieces out every now and then as thought experiments.”

Part of the thought experiment with Amazon is to find a way to describe the sprawling company. As a logistics-savvy retailer, Amazon might be compared with Walmart or Kmart. Taking a longer view, he said, Amazon's prowess puts it in rarer company, perhaps a peer to the Dutch East India Company.

“To find a comp, you really have to go back to history's great monopolies,” he said.

Gillespie said he won't miss being Amazon's lone bear.

“I've gotten a lot of questions about it,” he said, including an interview with a French documentary crew examining Amazon.

Gillespie figures it was all worth it.

Sometimes, he said, “there's no alternative thinking about critical issues.”

To contact the reporter on this story: Matt Day in Seattle at mday63@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Robin Ajello, Molly Schuetz

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