Amazon Could Have New Model After JPMorgan's $3 Billion Projection

Over the weekend, Adobe ADBE released its final figures for Amazon’s AMZN 2025 Prime Day, and based on direct transactions online, it found that U.S. retailers drove $24.1 billion in online spending, up 30.3% year over year and better than the 28.4% figure it forecasted.

That is certainly a positive for Amazon’s retail-facing business, but as we think about it, the expanded event should also be a positive one for its advertising business. More focused days to sell more ads to merchants and vendors is our thinking, and let’s remember that it is a very margin-friendly business for Amazon.

Interestingly, JPMorgan thinks the strength of that event and the company’s leaning toward similar events throughout the year could prompt a membership fee price increase for Prime in 2026. While it has been four years since the last Prime price increase, the firm says a $20 increase in Prime membership to $159 would bring in an additional $3 billion.

As shareholders, we would be open to the idea, but we suspect Amazon, much like Costco COST did, will monitor consumer metrics and visit the topic when it feels is right. We could see Amazon stuff more benefits into Prime, which would make it more membership-like than a subscription. That’s an effort we could get on board with, and it would make Prime even stickier.

Casting a slightly wider net and considering other retailers, including Walmart WMT, Target TGT, Best Buy BBY and Kohl's KSS ran competing shopping events, we’re going to see a big pop in digital shopping in the July Retail Sales report. Paired with comments from Delta Air Lines DAL about favorable transatlantic travel prospects in 2H 2025, we should see American Express AXP deliver favorable guidance for the current quarter when it reports on Friday (July 18).

RBC Ups Amex Price Target

Speaking of American Express, on Monday morning, RBC Capital raised its price target on AXP shares to $360 from $310, reiterating its Outperform rating. In the note, RBC shares its view that Amex’s fundamentals will be driven by "healthy though modest" consumer activity, seasonally higher loan balances, and improving credit metrics. Not really new information if you ask us, but in our view, the development we and others are now waiting for is more details behind the upcoming Platinum card refresh effort. With Amex saying this will be one of, if not its biggest, card refresh effort, we doubt the management team will say too much when Amex reports its June quarter.

As we digest those results and the updated outlook, we fully intend to revisit our AXP price target.

Citi Gets Onboard the Eaton Train

We’ve had our price target for Eaton ETN shares at $400 for some time now, but today Citi raised its target on the shares to $420 from $351. That’s a big revision, and it’s one Citi ties to favorable June quarter earnings expectations and a modest increase to the company’s 2025 outlook. Our view on Eaton stems from the expected data center build-out and other drivers of electricity demand that are leading utilities to add capacity.

To that end, when Duke Energy DUK, Dominion Energy D and other utilities report their June quarter, we’ll be comparing updated capex spending levels for 2025 and beyond against those shared in April. The same goes for Big Tech's capex levels for data centers. With the Wall Street consensus price target for ETN shares at $353, odds are we’ll see other firms bump up their ETN price targets in the coming weeks.

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At the time of publication, TheStreet Pro Portfolio was long AMZN, COST, AXP and ETN.