Amazon’s strong revenue growth has been a key highlight over 2019, however, following its 3Q19 result (24 October), the market responded negatively to softer than expected 4Q19 profit guidance. AMZN’s lower profit guidance was actually a positive because it reflected Amazon’s commitment to increase short term costs (adding salespeople and promoting 1-day shipping) to maintain strong sales growth, strengthening AMZN’s online/logistics competitive advantage. In our view, Amazon offers excellent value under US$2,100 and, having underperformed its global peers and the broader market over the past couple of years, Amazon enters 2020 as one of our top picks for the year ahead.
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