Black Friday is coming up in just two weeks, marking the start of this year’s holiday shopping season, and the experts are already trying to predict what retailers can expect from ‘the American consumer’. Will 70-inch flat screen TVs run out the door at loss-leader prices? How will Apple’s iPhones hold up? Will an important past trend continue, with buyers continuing to migrate toward online retailers?

That last may be key. Brick-and-mortar retail has been feeling a hurt from online competition for years now and there is no sign that this trend will falter. The biggest questions are, how long will traditional stores hold out, and how will the market divvy up in the end?

Let’s take a closer look:

First off the Blocks

Jeff Bezos’ company is the 800-pound gorilla the online retail room. With a $795B market cap, Amazon.com, Inc. (AMZN – Research Report) has the third largest cash holdings of any publicly traded company; in fact, it touched the $1 trillion mark earlier this year. What started out as an online book store 22 years ago is now a retail behemoth selling almost anything you can think of – and delivering it right to your door.

Such size has a quality all its own, and Amazon helps to prove that. The share price stands above $1,600 and is commanding an optimistic outlook, despite losing 24% since September and whiffing slightly on the Q3 earnings report. AMZN holds a whopping 33 ‘Buy’ ratings and stands near the top of TipRanks ‘Most Recommended’ stocks. Checking with the analysts gives us some idea why now may be the right time to acquire Amazon.

Ronald Josey (Track Record & Ratings) of JMP Securities forthrightly acknowledged the underwhelming Q3 report, but noted that company remains strong: “While we acknowledge the concerns post earnings around decelerating revenue and unit growth, we highlight significantly improving profitability and the continued potential across all of Amazon’s initiatives…” He set a $2,050 price target, giving a 26% upside forecast.

With such a high share price, it may seem that AMZN lacks much room for growth. Victor Anthony (Track Record & Ratings) from Aegis feels otherwise, however, and bumped his price target up to $2,225 – a 37% upside! He justifies his outlook by saying, “Amazon, in our view, remains one of the best longer-term values in Tech and we still see a path to where the shares could double over the next three years.”

Finally, in the most recent review of Amazon stock, Stifel’s Scott Devitt (Track Record & Ratings) reiterated his belief that “Amazon’s Q4 revenue guidance and the deceleration in online sales shouldn’t be a cause for concern…” and noting, “Amazon’s actual reported revenue growth has trended near the higher end of the guidance range in recent years.” He gives AMZN a 48% upside, and a target price of $2,400.

The analyst consensus on Amazon is a ‘Strong Buy,’ and upside is 33% with an average price target of $2,165. Amazon closed trading on November 5 with the share price at $1,627, down by 2.26%, or $37. Compared to the forecasts, and the company’s known strengths, this may be the time to pick up Amazon on the dip.

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View AMZN Price Target & Analyst Ratings Detail

An Early Competitor Still in the Game

eBay Inc. (EBAY – Research Report) has been underperforming in the markets lately, and share prices have fallen almost 30% this year. There doesn’t seem to be an easy answer why that is, however, as the company showed real strength in last week’s Q3 earnings report. Earnings per share came in at $0.55, compared $0.48 one year ago, while the quarterly revenues of $2.65B exceeded last year’s Q3 revenues of $2.41B.

The analysts have noticed. Last week, eBay received 14 analyst reviews – 9 ‘Buy’ ratings, 4 ‘Hold’ ratings, and one ‘Sell.’ Some of the recent ‘Buy’ ratings bear a closer look; they may shed some light on the strength under eBay's softness, and perhaps clarify whether eBay is a bargain now, while it’s down.

Raymond James’ Aaron Kessler (Track Record & Ratings) gave eBay a $35 price target, without comment. Eric Sheridan (Track Record & Ratings), from UBS, maintained a ‘Buy’ rating, also without comment, and set his price target at $42 – a $2 drop from his previous target. Clearly, while these top analysts see eBay as a stock opportunity to buy at a discount, they have some reservations.

Aegis’ Victor Anthony (Track Record & Ratings) definitely sees a share price recovery in the future for eBay, and he does not hold back on saying so: “We model Non-GAAP EPS growth of 14% in 2019 and another 14% in 2020, which could prove conservative given the shift of focus to increased margins. If eBay gets to our $3 in 15x multiple gets us to $45.”

Anthony has been tracking eBay over the last two years, and has a solid record on his forecasts:

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eBay shares currently hold a ‘Moderate Buy’ rating on the analyst consensus, with the average price target of $38 giving a 28% upside from the current share price of $29. The company stands to gain as holiday shoppers look for online bargains.

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View eBay Price Target & Analyst Ratings Detail

An Arrival from China

Alibaba Group Holding (BABA – Research Report) is looking forward to Singles Day, the biggest shopping day of the year in China. The company expects to fare well, which is no surprise for this e-commerce giant, but the big one-day traffic and revenue totals may not fully cover up some real concerns about the economic background in China.

As US President Donald Trump dials up his trade war, turning rhetoric into policy, and as slower wage growth and tighter lending link up with a weaker yuan to dampen Chinese consumers’ appetite for, well, consumption, retailers – even online retailers – are starting to look at retrenchment.

Analysts are still bullish on BABA, though. The stock is another of the TipRanks’ top analyst picks, with 16 ‘Buy’ ratings in a row, dating back nine months. Clearly, something about Alibaba bears notice. Let’s see what some of those analysts have to say.

To start with, they see plenty of strength under the softness. Youssef Squali (Track Record & Ratings) from SunTrust set a price target of $180, a 7% cut, commenting that he sees reason for optimism in BABA: “…we believe the longer term prospects for BABA remain positive as the monetization potential of the platform is massive, especially as UI adjustments short term improve customer segmentation [and] targeting and drive conversion…” His price target, even reduced, gives a 25% upside over the current share price.

Nomura’s Jailong Shi (Track Record & Ratings) dropped his price target by only 1%, to $200, saying, “As widely speculated by the market, Ali officially revised down its FY19F revenue guidance by 4-6%, which the management says is attributable mainly to slower customer management revenue, as Ali decided to suspend releasing new ad inventories in view of a softening macro environment, which we believe is the right decision.” Sometimes, a strong company can cut back to weather a storm. Alibaba, by sheer size, has plenty of options when the business environment turns.

Finally, Fawne Jiang (Track Record & Ratings) of Benchmark gave BABA a $205 target price, also a 7% cut. She said that she was “encouraged to see continued upward trends in user and traffic growth,” despite the company’s lower guidance for FY19. Even her lowered price target still indicates a 41% upside. Jiang has a strong record on Alibaba stock, with a 59% success rate and a +32% average return.

BABA currently sells at $146 and has an average price target of $216, for a 47% upside forecast. The analyst consensus is a ‘Strong Buy,’ based on those 16 consecutive ‘Buy’ ratings – and that’s with the reduced price targets. Clearly, market analysts expect Alibaba to continue its dominant role in online commerce.

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View BABA Price Target & Analyst Ratings Detail