Goldman Sachs analyst Christopher Merwin upgraded Shopify (SHOP) to Buy from Neutral with an unchanged price target of $1,127.

The stock closed Monday up $46.58 to $976.39.

Following global shelter-in-place orders in response to COVID, e-commerce penetration went from 16% of retail spending in the U.S. in Q1 to 40% in May, Merwin tells investors in a research note. Goldman Sachs' internet team now estimates U.S. e-commerce revenue will grow 29% this year, up from 15% previously, the analyst points out.

This will provide a "sustained tailwind" to Shopify's gross merchandise volume growth and by extension its merchant solutions revenue, says Merwin. He adds that the company has one of the largest total addressable markets in software at an estimated $200B globally. As such, the analyst believes Shopify should be able to sustain "hyper-growth for longer than the market expects."