Jefferies: Amazon Trades at a One-Third Valuation Discount to Walmart and Google
Alina Collins
Jefferies flags Amazon's EV/EBITDA at just 12x — roughly a third below the 18x blended average of Walmart and Google — maintaining a Buy rating with a $320 target implying 29% upside.
Where exactly is the discount?
Amazon's EV/EBITDA — a ratio of enterprise value to pre-tax profit; the lower the multiple, the "cheaper" the stock — sits at roughly 12x. Walmart trades at 19x, Google at 17x, averaging 18x.
This means → the market prices Amazon at a one-third discount to peers of comparable scale in retail and advertising.
In plain terms = for every dollar of profit, buying Amazon costs $12; buying Walmart costs $19. Amazon is the cheapest of the three.
What rating and target did Jefferies set?
Jefferies maintains a Buy rating with a $320 price target, implying roughly 29% upside from the prior day's close.
Amazon shares rose about 3% on the day of the report.
Analyst Brent Thill noted that limited gains over the past three months have "only made an already attractive entry point cheaper."
Why is the AI data-center push a catalyst?
Thill highlights Amazon's AI data-center expansion as a potential near-term share-price catalyst, especially if the company raises its capital-expenditure guidance this year.
The report cites industry experts calling the current pace of data-center buildout "unprecedented," adding that market estimates for Amazon's full-year capex and free cash flow "may still be too low."
This means → if Amazon ramps AI spending and raises guidance, the market may reprice the stock — and the valuation gap could narrow.
How does broader Wall Street view Amazon?
Per LSEG data, 65 of 69 analysts covering Amazon rate it Buy or Strong Buy; four rate it Hold. None are bearish.
Yet Amazon is up only about 13% year-to-date, trailing the S&P 500's roughly 21% gain.
This reflects a contradiction: near-unanimous bullishness, but underperformance versus the index — suggesting the market is waiting for a clear catalyst, not questioning the fundamentals.
What to watch next?
The key checkpoint: whether Amazon raises its AI capex guidance before year-end.
An upgrade could narrow the valuation discount; without one, the current "cheapness" may persist.
In plain terms = the discount is real, but whether cheap turns into gains depends on the company signaling its own confidence.
Content is for reference only, not financial advice.