Amazon on Friday announced plans for the opening of its first 640,000 square-foot fulfillment center in the state of South Dakota in Sioux Falls.
The site, which is estimated to open its doors in 2022, has the potential to create up to 1,000 full-time jobs. The employees will work alongside Amazon (AMZN) robotics to pick, pack, and ship small items to customers like books, electronics, and toys.
“Amazon leverages its scale for good and makes investments to support communities. We appreciate the strong support from local and state leaders throughout the process, and we look forward to supporting the South Dakota community with great delivery options.” said Amazon’s VP, Alicia Boler Davis.
The announcement comes just a day after Amazon had announced plans to open a new fulfillment center in North Little Rock, Arkansas to create over 500 new, full-time jobs.
AMZN stock has gained 73% year-to-date and is trading at a discount of close to 10% to its 52-week high. (See AMZN stock analysis on TipRanks)
Last week, Mizuho Securities analyst James Lee reiterated a Buy rating on the stock with a price target of $4,000. This target implies that investors could be yielding a 25% gain over the coming 12 months.
Lee believes that the company has a substantial growth opportunity in FY21 due to the increased penetration into grocery markets, the continued rebound in discretionary products, and the large TAM in online pharmacy.
"We view Amazon’s aggressive buildout plan for fulfillment centers and logistics as a leading indicator for demand of new product lines. That said, consensus FY21 revenue growth of 18% YoY appears conservative," Lee wrote in a note to investors.
"Also, COVID-related expenses of nearly $11bn in FY20 should not be recurring as vaccines become widely available, and long-term online pharmacy margins are likely accretive," the analyst added.
From the rest of the Street, the stock scores a Strong Buy analyst consensus based on 36 Buys and 1 Hold. The average price target of $3,825.60 implies upside potential of 19.5% at current levels.
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