Amazon stock price forecast
According to analysts, Amazon was arguably the biggest beneficiary of the coronavirus pandemic, and that is unlikely to change under new CEO Andy Jassy.
Investors will be looking for signs of slowing e-commerce growth as well as what the company will do to combat it.
According to analysts, Amazon has a slew of other levers to pull, including expanding Prime memberships and Amazon Web Services, as well as making additional investments.
Amazon shares are up more than 11% this year, while the S&P 500 is up 17%.
Analysts predict the following Amazon earnings:
“AMZN remains our top idea, and we are bullish on shares heading into 2Q earnings and the back half overall,” wrote JPMorgan.
The company did, however, acknowledge a sense of urgency surrounding the stock.
“We note some investor caution around the Prime Day contribution and 2H growth rates against tough comps,” JPMorgan analyst Doug Anmuth said.
Morgan Stanley analyst Brian Nowak expressed a similar sentiment in his preview note to clients.
Nowak claimed that shareholders were overly concerned about revenue declines.
Meanwhile, investment firm UBS acknowledged that slowing growth was possible, but added that it could help reset Amazon’s consistently high expectations.
Nonetheless, the firm was not backing down from its bullish stance on the stock.
“The important point is that this print serves as a healthy reminder that AMZN has a dominant position in a secular trend that will last for some time,” analyst Michael Lasser said.
Other analysts reiterated their belief that Amazon is a critical core long-term holding, regardless of what happens on Thursday afternoon.
“We believe the market continues to undervalue AMZN’s elevated long-term growth and margin prospects derived from its three pillars, ecommerce, Prime and cloud, and emerging leadership in online advertising,” said Truist analyst Youssef Squali.
Shareholders should buy the stock now and not look back, according to Bank of America.
“Despite U.S. eCommerce headwinds in the third quarter, we believe Amazon will gain share, AWS will see upside, and the stock will benefit from discounts embedded in SOTP multiples vs peers,” analyst Justin Post said.
MKM – Purchase rating
“We believe two factors have been weighing on AMZN shares: weak Prime Day results and a weaker dollar.
After unemployment benefits expire, the outlook for 2H Retail/Commerce is hotly debated. However, given the strength of Amazon advertising, subscriptions (Prime), and cloud computing, we expect AMZN to outperform the market and its guidance in the second quarter.”
Outperform rating by Bernstein
“On short-term price performance, we’ve found ourselves throwing our hands in the air at times. However, after being range-bound for the better part of a year, the stock has begun to work again, and we are cautiously optimistic about the potential for a greater B2B push under Andy Jassy.”
JPMorgan has an overweight rating.
“AMZN remains our TOP IDEA, and we are bullish on shares heading into 2Q earnings and the back half of the year overall.” We believe AMZN is less owned than GOOGL and FB, and sentiment is more cautious than usual due to concerns about Prime Day growth and second-quarter expectations. We do note, however, that there is some investor skepticism about the Prime Day contribution and 2H growth rates against tough comps.”
Morgan Stanley has assigned an Overweight rating to the company.
“At a high level, AMZN remains our top large-cap pick because we believe the market is overly concerned about revenue deceleration and undervalues the GAAP profit potential in ’22/’23, even after reinvestment.”
Truist – Buy recommendation
“We maintain a Buy rating and $4,000 price target ahead of 2Q21 results, which we believe will show strong top-line growth fueled by sustained momentum in ecommerce demand both in the US and internationally, even as the global economy gradually reopens post-pandemic….” We believe the market continues to undervalue AMZN’s elevated long-term growth and margin prospects stemming from its three pillars, ecommerce, Prime, and cloud, as well as emerging leadership in online advertising.”
Bank of America – Buy recommendation
“We believe the stock is best positioned after fourth-quarter guidance is provided, when the market can begin to anticipate more normal growth comps in 2022. We are lowering our purchase order to $4,350 to reflect slightly lower retail revenue estimates and unchanged sum-of-parts multiples. Despite U.S. eCommerce headwinds in the third quarter, we believe Amazon will gain share, AWS will see upside, and the stock will benefit from discounts embedded in SOTP multiples versus peers.”
Buy rating as a benchmark
“Amazon is set to report 2Q21 results after the market closes on Thursday. Shares have only recently begun to break out of a nearly 12-month trading range, aided, unfortunately, by growing fears of a pandemic resurgence. While this may ultimately prove to be a minor tailwind, we believe that a strong Prime Day, an early back-to-school season with potential shortages, and no discernible slowdown in consumer spending could contribute to an upside surprise and better-than-expected 3Q guidance.”
Wedbush has an outperform rating.
“Amazon’s profitability should increase as opex grows at a slower rate than revenues. Amazon Web Services, Fulfillment by Amazon, and advertising should drive consistent margin expansion, while Prime memberships will drive overall retail revenue growth. We anticipate that Q2 results will be at or above the high end of guidance, driven by Prime Day, ecommerce share gains, and a recovering economy.”
UBS has a Buy rating.
“Amazon’s upcoming second-quarter results should be a positive event….” Nonetheless, we believe the market is bracing for slower growth. If anything, a slight slowing in growth this quarter will help to rebalance expectations for the coming quarters. The important point is that this print will serve as a healthy reminder that AMZN has a dominant position in a long-term trend.”
Outperform rating for Raymond James
“We maintain our positive view on Amazon shares based on the following factors: 1) continued momentum in eCommerce sales; 2) continued leadership and strong growth in cloud; 3) robust advertising growth; and 4) an improving margin profile driven by retail scale efficiencies, AWS, and advertising.”
Telsey has an outperform rating.
“Overall, we believe Amazon is executing well and gaining market share by capitalizing on its loyal Prime membership, small business relationships, and retail consolidation. Amazon is becoming more valuable as it focuses on newer businesses such as grocery, pharmacy, fashion, home, private brands, third-party, same-day & one-day delivery, Amazon Logistics, and telehealth.”
Credit Suisse has received an outperform rating.
“We maintain our Outperform rating, with the thesis based on the following: 1) e-commerce segment operating margin expansion as it expands into its larger infrastructure, 2) flexibility for faster-than-expected [free cash flow] growth relative to its advertising segment, and 3) upward bias to AWS revenue forecasts and likely more moderate deceleration path as suggested by ongoing capital intensity in e-commerce.