While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Amazon.com (NASDAQ:AMZN) gained slightly on Monday after Deutsche Bank reiterated its buy rating for the online retail gorilla.

So what: Along with the bullish note, analyst Ross Sandler reaffirmed his $400 price target on the stock, representing about 12% worth of upside to Friday's close. So while contrarian traders might be turned off by Amazon's price strength in recent months, Sandler's call could reflect a sense on Wall Street that the company's growth prospects -- driven mainly by its Amazon Prime membership service -- still aren't fully baked into the valuation.

Now what: Deutsche expects Prime to reach 100 million members in 2020 and be worth over half of Amazon's market cap. "Prime is arguably the most valuable and important growth trend for Amazon, representing around 50% of company GMV today," said Sandler. "At an estimated 32m customers (13% of total, growing at around 45% Y/Y) and high GMV but low contribution margin, the mix shift to Prime is critical to the AMZN investment thesis. Prime's value to Amazon is simple: 1) it creates a competitive moat around AMZN's e-commerce business, 2) it drives up loyalty and 3) Prime increases wallet share and captures higher customer LTV." When you couple those Prime-related prospects with Amazon's already-impressive scale advantages, it's tough to disagree with Deutsche's bullishness.


Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.