Sales Tax Threat Won’t Blunt Amazon Growth: Report
29 Mar 2018
Shares of Amazon.com (AMZN) tumbled 4% Wednesday on an Axios report that President Donald Trump wants to change the e-tail giant’s tax status and “go after” it on antitrust grounds.
The perceived threat, which the White House rebuffed, slashed more than $50 billions off of Amazon’s market valuation.
But the pain is probably short-lived, says a prominent Amazon analyst, who maintains a Buy rating with a $1,800 price target. (Amazon shares are up 63% the last year, while the S&P 500 has gained 10%.)
In a note Wednesday, Scott Devitt, internet analyst at Stifel, wrote that even if some form of sales tax is collected on third-party sellers, he sees little impact on Amazon’s growth for gross merchandise volume.
In addition, Devitt said Amazon’s history of building consumer trust helps it. “Consumer internet companies that respect consumers will win over the long-term,” he wrote.
Trump, who made Amazon’s tax status a campaign issue, has made no bones about his objection to the company’s influence and its CEO, Jeff Bezos, who also happens to be owner of the often Trump-critical Washington Post.