Amazon.com Inc. (NASDAQ: AMZN) has made a huge splash in the markets so far in 2016 as a major disrupter in the retail industry. The stock’s performance might not currently reflect this, with shares up only about 4% on the year thus far, but one key analyst sees this as a jumping off point. Keep in mind that Amazon is up over 60% from the same time last year.

Merrill Lynch reiterated a Buy rating for Amazon with an $840 price objective, implying an upside of nearly 20% from the current price level. Ultimately the firm believes that Amazon Business opportunity is widely underappreciated.

Amazon launched Amazon Supply in 2012 and re-branded the initiative Amazon Business in April 2015. It is a marketplace that combines positive attributes of Amazon’s consumer marketplace – selection, convenience and value – with features and benefits tailored to businesses, government organizations and the education sectors.

With “hundreds of millions of products” in the industrial/scientific, packaging and shipping, food service, nursing, education, building and other supply categories and integration with procurement applications, Merrill Lynch thinks Amazon Business may be a bigger opportunity than the street realizes. The company recently indicated that Amazon Business reached $1 billion in sales in its first year, is serving 300,000 customers and had 20% month-over-month growth. Issues Amazon likely will need to address in the category are the need to build out more specialized procurement platforms/interfaces and offer specialized customer service, which will aid Amazon’s ability to compete versus well established competitors.

According to Frost & Sullivan, global business-to-business (B2B) e-commerce will reach $6.7 trillion in 2020. In the U.S. alone B2B e-commerce is expected to hit $1 trillion in 2018, according to Forrester, which is more than double Merrill Lynch’s U.S. e-commerce market estimate for 2018 of $485 billion.

Merrill Lynch believes B2B provides a significant runway for growth, which could help Amazon sustain its growth rates and premium valuation for many years. The firm estimates Amazon Business 2016 gross merchandise value (GMV) at $3.5 billion, with GMV exceeding $25 billion by 2020. Furthermore, the brokerage firm sees its estimates as conservative considering the larger addressable market, very low current awareness of Amazon’s efforts in the category, and disclosure of recent category traction.

The investment rationale given by Merrill Lynch was as follows:

Amazon is an eCommerce leader with market share and margin potential stemming from its global scale, fulfillment footprint and technology platform investments. We think Amazon’s focus on the customers and the buyer experience is right for the Internet, and we consider Amazon a transformational company. We think Amazon is well positioned to capitalize on the global growth of eCommerce and other secular trends such as cloud computing, online advertising, connected devices, and mobile commerce.

Shares of Amazon were trading at $699.02 Monday morning, with a consensus analyst price target of $793.26 and a 52-week trading range of $419.14 to $722.45.

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