Amazon stock forecast based on 35 Wall Street analysts’ 12-month price forecasts for Amazon in the last three months. The average price estimate is $140.64, with a top of $232.75 and a low of $80.00 expected. The average price prediction reflects a 22% decrease over the previous price of $180.00.
Amazon has had to deal with increased expenses because of the surplus of staff and storage space that resulted from the company’s rapid growth in response to the pandemic. After nearly tripling in size during the pandemic, Amazon reduced its workforce to 1.52 million by the end of the second quarter.
Is Amazon Stock a Must-Have in 2023?
After dropping by half this year, Amazon stock seems promising. The company may be on the verge of a revival after a disastrous 2022. The IT behemoth is expected to have one of its lowest growth rates this year.
Through Q1, Q2, and Q3 of 2022, the company’s e-commerce-focused companies lost about $8 billion. As a result, it announced the first massive layoffs in its history, including the dismissal of 10,000 employees from the corporate office. Alexa, one of Amazon’s most prominent divisions, is being singled out because of reports that the company is losing $10 billion annually on its voice-activated technology.
After years of aggressively expanding into new markets, including e-commerce, books, cloud computing, video streaming, and digital advertising, Amazon now finds itself in an unusually defensive position.
The good news for buyers of the stock is that these negative factors have likely already been factored in. Moreover, since its 2017 high, Amazon’s share price has dropped by half; this decline may provide an opportunity for investors.
Amazon Shares May Increase by 52.4% to 59.6% in 2023, According to Wall Street
Analysts on Wall Street believe that 2023 is a reasonable time for Amazon’s stock price to recover after falling by more than half from its last high.
Wall Street professionals know that a bull market has followed every bear market. That’s why they’re predicting significant gains for companies whose fundamentals are more robust than their stock prices now reflect. For example, they predict that Amazon stock will increase by between 50.2 and 59.6 percent in 2023.
Amazon’s (AMZN -0.67%) share price has fallen nearly half from its 2021 high. However, some of those losses may be recouped in 2023, according to analysts who track this e-commerce and cloud services behemoth. Assuming the market eventually recognizes Amazon’s companies in the same light as investment bankers, the current average price objective on the stock indicates a rise of 53.6%.
Amazon’s stock price has been falling steadily this year as investors react to the company’s bottom line, which took a bad turn and went into negative territory at the beginning of the year. The lockdown phase of the COVID-19 epidemic caused a sharp increase in demand for order fulfillment services, and the corporation overreacted to this.
It’s just a matter of time until Amazon’s storage capacity and delivery capacity catches up to demand, given the continued shift from traditional retail to online shopping. Meanwhile, the company’s cloud services division will more than make up the difference. Amazon Web Services (AWS) operating earnings increased by 10% year over year, reaching $5.4 billion in Q3.
Wells Fargo has a “Buy” rating on shares of Amazon.com (AMZN)
Yesterday, Brian Fitzgerald, an analyst at Wells Fargo, maintained his Buy rating and $155.00 price target on Amazon (AMZN). As of yesterday’s market closing, the stock was valued at $88.45.
The current opinion among Wall Street analysts is a Strong Buy, with an average PT of $140.50, representing a 58.85% increase from current levels. Citigroup maintained its Buy rating and $145.00 price target on the company in a research published on December 8.
The 12-month range for the stock price is $174.17 to $85.87. Amazon’s current average volume is 77.92M.
Highest-Rated Amazon.com Reports from Industry Experts
The stock price of Amazon.com has fallen significantly this year due to two main issues – the unusual tightening stance of the Federal Reserve has increased the possibility of a recession in the United States, which has a knock-on effect on Amazon’s growth prospects.
Secondly, the growth brought ahead during Covid is weighing on Amazon’s near-term growth expectations. As a result, the corporation is presently rationalizing via layoffs and facility closures due to a mismatch between ‘capacity’ and demand growth caused by the company’s heavy investment in human and physical capacity during Covid.
Compared to the -17.2% drop in the S&P 500 index and the -26.5% drop in the Zacks Retail sector, Amazon stock is down 47.9% so far this year. Walmart, Amazon’s primary competitor in the Retail industry, is up 4.8% so far this year.
However, momentum in Prime and AWS contributed to Amazon’s success in the third quarter. The increasing popularity of AWS and the quality of its services both had a role.
Faster delivery times and a wider variety of available media were helpful. In addition, it was beneficial to forge closer ties with resellers outside the company. Having a thriving advertising industry was a huge help. Gains in Alexa’s functionality and the availability of several smart home items served as tailwinds.
The company’s worldwide reach and continued success with small and medium-sized enterprises are encouraging signs. Also, Amazon’s expanding skills in grocery, pharmacy, Amazon Care, Kuiper, and Zoox seem promising. As a result, the Zacks analyst has calculated that the company’s sales would increase by 8.3% in 2022 compared to 2021.
Amazon Receives Citations From the Labor Department Due to Warehouse Injuries
OSHA inspected six Amazon warehouses for worker safety. Recently, Amazon has been investigated for possible violations of worker safety rules. Federal authorities have issued several citations against Amazon.com, Inc.
A spokesman for the U.S. attorney’s office for the Southern District of New York said that the Occupational Safety and Health Administration (OSHA) of the Department of Labor issued citations on Thursday after conducting workplace safety inspections at Amazon facilities outside of New York City, including in Albany, Denver, Boise, Chicago, and Orlando, Florida.
Amazon’s warehouses, where shipments are stored, sorted, and sent, have been under scrutiny recently for working regulations and safety. After a tornado destroyed an Amazon warehouse in Illinois, killing six employees, the state of Illinois and the Occupational Safety and Health Administration (OSHA) launched separate investigations into the company’s warehouse procedures. The government raised concerns about Amazon’s catastrophe response but did not levy any penalties on the company.
After receiving accusations of health and safety concerns at Amazon facilities, Federal officials said they were investigating in July. As reported at the time, the civil division is looking into Amazon for “potential fraudulent activity meant to conceal accidents from OSHA and others.”
According to federal labor statistics, Amazon has had a higher injury rate than its competitors in recent years. In addition, the firm has previously indicated that it records occurrences more thoroughly than competitors, which may cause its injury rates to look higher than industry averages.
Some employees in Amazon’s warehouses have griped about the fast speed at which they are expected to work. Some workers have complained that there needs to be more time for breaks, as they frequently have to sort or pack hundreds of things every hour, requiring them to engage in repeated movements.
Amazon has been known to reprimand workers who fail to meet shift-by-shift goals for package preparation and other tasks. However, the business has claimed in recent years that it has made efforts to modify how it monitors workers to account for unusual occurrences. In addition, a quick pace of work has been cited by several workers as a motivating factor in their quest to form a union at the corporation.
Amazon and other California firms must be clear about their quotas or workplace productivity metrics. The rule was passed into law by Governor Gavin Newsom last year. This legislation aims to prevent employers from imposing requirements or penalties that jeopardize the health and safety of their workers in any way, including by interfering with their freedom to take necessary breaks or use the restroom.
Amazon has said that it is taking steps to ensure the safety of its employees. Earlier this year, CEO Andy Jassy acknowledged that the company’s injury rates were “often misconstrued,” but he promised to improve the situation.
Although Amazon has increased its workforce to keep up with demand, the company has also expanded its warehouse automation. One of the new robots introduced last month has an arm that combines sophisticated AI with various grippers, and it has the potential to one day replace specific positions at Amazon.
JPMorgan still sees a “compelling opportunity” in Amazon shares despite “cloud worries.”
According to one analyst, Amazon Web Services’ recent actions “will undoubtedly result in some pricing concessions” but may help enhance customer ties.
An expert has observed that investors are apprehensive about Amazon’s AWS cloud-computing business in the current spending environment. JPMorgan analyst Doug Anmuth believes investors underrate Amazon.com Inc.’s potential despite the stock’s recent “multiyear low” sentiment.
He thinks the cloud computing division of Amazon AMZN is where most of the company’s problems lie since some customers are cutting back on spending in light of the uncertain economic climate.
Amazon (AMZN) Stock Moves -0.67%: What You Should Know
The most recent trading day for Amazon (AMZN) ended with the stock price at $87.86, down 0.67 percent from the previous trading day’s closing. The daily loss on the S&P 500 index was 1.11%. Comparatively, the tech-focused Nasdaq gained 0.1% while the Dow fell 0.85%.
The online retailer’s shares were down 6.75 percent today, underperforming both the Retail-Wholesale sector’s 2.94 percent loss and the S&P 500’s 2.19 percent drop during the same period.
As Amazon prepares to report profits, investors are crossing their fingers for further growth. On that day, analysts anticipate Amazon will announce earnings of $0.18 per share, a decrease of 87.05% from the previous year. However, Zacks’s Consensus Estimate for revenue is at $145.63B, an increase of 5.98% over the prior year.
For the whole year, the analysts polled by Zacks predict a loss of $0.12 per share on sales of $510.41 billion. These figures represent shifts of -103.7 percent and 8.64 percent from the previous year. The latest revisions to Amazon analyst price targets are also noteworthy. Changes like this usually indicate shifts in short-term business trends. So, rising projections are encouraging for the company’s future success.
Our data suggest that these changes in forecasting methodology are causally linked to changes in stock prices for companies in the same industry. The Zacks Rank may help investors take advantage of this. This approach considers these estimation shifts and gives a straightforward, usable scoring scheme.
For example, since 1988, #1 stocks have had an average yearly return of +25% based on the Zacks Rank methodology, which uses a scale from #1 (Strong Buy) to #5 (Strong Sell). Amazon’s current Zacks Rank is #3. (Hold).
In terms of value, Amazon has a Forward P/E ratio of 127.68 as of this writing. Amazon is selling at a premium to its industry, with an average Forward P/E of 25.32.
It’s also important to note that AMZN’s PEG ratio is 6.33. The PEG ratio is a valuation indicator used similarly to the more well-known P/E ratio. Still, it additionally factors in the stock’s predicted profits growth rate. At yesterday’s close, the Internet-Commerce sector had a PEG ratio of 1.26.
Amazon goes TikTok: Amazon Debuts Feed That Looks Like TikTok to Drive Social Shopping
Amazon is joining Facebook and Google in an effort to cash in on the rising popularity of the video format. Amazon is adding a TikTok-style function to its app so that users can shop directly from their feed for user-generated photographs and videos.
The function was released on Thursday to many customers and will be made accessible to the rest of the U.S. in the coming months. In addition, the Inspire gateway will provide users with a constant stream of media highlighting things that can be purchased inside the app. In August, The Wall Street Journal reported that Amazon was doing trials of Inspire with a select group of workers.
Forging into social commerce and joining Facebook META, Amazon introduced Inspire.
Meta Platforms Inc. increased by 2.82 percent; a green up arrow indicates growth, while Alphabet Inc.’s GOOG decreased by 0.37 percent; a red down arrow indicates decline. TikTok, owned by Chinese company ByteDance Ltd., has risen in popularity thanks to its short-video format, which Google and others have targeted.
Many IT firms have attempted, with varying success, to merge the two worlds of online buying and social interactions. As it has expanded into social commerce, Amazon has been actively seeking out influencers to work with.
The company said sales at Amazon might be lower than expected in the fourth quarter.
The number of people who utilize Amazon is in the hundreds of millions. In an interview, Amazon’s head of shopping, Oliver Messenger, recently said that short-form video is “a really powerful medium of helping customers find and understand things.” “The use of video-based information is great for enhancing customers’ understanding of the product.”
Mr. Messenger said that despite Inspire’s emphasis on e-commerce, the platform has social characteristics and has the potential to add features like the ability to share material and trending content.
Shoppers may “like” and buy the featured goods in a continuous stream of photos and videos when they click on the widget and are sent to a feed displaying these items. In addition, customers can read product descriptions and put items in their shopping carts.
When customers initially use Inspire, they will be prompted to choose an interest, such as gaming or pets. After that, the portal will tailor information to them based on their selections, becoming more accurate over time. In addition, Amazon has announced that users could purchase items promoted by other customers, influencers, and companies.
Tech businesses have needed help figuring out how to make online purchasing more like a social experience. For example, the Journal reported in May that Meta’s e-commerce services, launched in 2020, had yet to meet expectations. At the time, several stores complained that the service lacked essential features like sizing and color options for goods not offered directly via Facebook and Instagram, as well as restrictions on where a store could send an item and whether or not it could be delivered the next day.
When the Chinese company TikTok became one of the most popular and influential social media networks, several firms, Meta included, rushed to market with products that mimicked the platform’s addicting, never-ending stream of short video material. Meta’s short-video product, Reels, was introduced in 2020 and had its worldwide debut in February. YouTube Shorts, which may be up to 60 seconds long, was introduced in the United States by Google in the previous year.
Mr. Messenger said the business would consider user input when making future improvements to Inspire.
Right now is Amazon’s busiest selling season of the year. But, after stating it overexpanded during the Covid-19 outbreak, the corporation has warned that fourth-quarter revenues might fall short of projections and has lately moved to slash hundreds of corporate staff.
The firm has experienced a decline in customer satisfaction due to complaints about the quality of the company’s search results, goods, search adverts, customer support, and delivery concerns. However, Amazon claims it is continually working to enhance its website and app and that its customers are still quite happy overall with their experience.
The company’s previous attempts to recruit social producers and influencers have been expanded upon with the introduction of Inspire. In recent years, Amazon has spent a lot of time and effort trying to recruit prominent figures in the social media sphere to join its “influencer” program. This program enables artists to set up their own Amazon sites and profit from affiliate links shared with their followers. According to the article, influencers may expand their enterprises by using Inspire.
Predictions for Amazon in the Year 2023
Amazon’s business could increase despite macroeconomic uncertainty in the next year.
In 2023, the corporation can look back on far more favorable comparisons. Through Q1, Q2, and Q3 of the year, revenue is up 9.7 percent, and the business forecast only 2%-8% growth in the fourth quarter. The dollar’s appreciation has been a drag on performance this year, but with the currency starting to cool down after reaching its September top, this headwind could subside in 2019.
The IT giant is also anticipated to enjoy a rise in profit margins. Chief Executive Officer Andy Jassy is concentrating on reducing or eliminating unnecessary initiatives. Amazon Care, a trial program in telemedicine and in-person healthcare; Scout, a home delivery robot; and Fabric.com, an online retailer for sewing materials, are all discontinued as part of the company’s effort to reduce losses at Alexa.
As a further indication that it misjudged its e-commerce development trajectory during the epidemic, the corporation has shelved or abandoned plans for hundreds of facilities.
Amazon’s third-party marketplace allows it to receive commissions and fulfillment fees from the hundreds of merchants that sell on its website, making it one of Amazon’s high-margin industries, along with Amazon Web Services (AWS) and advertising.
However, the company’s financials reveal that it continues to use excessive resources. By consistently losing money in overseas operations, Amazon, for instance, may be spreading itself too thin in developing countries and niche markets. One might make a similar case: Amazon is wasting money on Prime Video. More than $15 billion will be spent on streaming content this year, surpassing even Netflix’s expenditure, yet Amazon doesn’t directly commercialize that spending, instead leveraging it to promote Prime memberships.
Given the company’s penchant for experimentation, there are probably many such dead ends that might use some slashing and burning.
Five-year Amazon (AMZN) stock forecast price
A record closing price of $3,731.41 was set on July 8, 2021. However, inflation, quantitative easing, and rising interest rates contributed to a decline in the price, which continued through the end of the year and early 2022.
On January 27, investment bank BMO Capital Markets had lowered its Amazon price estimate by $800 (down from $4,100). However, since then, most Amazon stock predictions have indicated a price of at least $4,000 per share.
Tigress Financial raised its price objective from $4,460 to $4,655 on February 18. On March 10, Deutsche Bank analysts gave Amazon a ‘buy’ (previously you’ve capped ‘Buy’)rating and a target of $4,100 for their future stock, this followed the news of Amazon’s new salary policies.
JP Morgan, a US-based research firm, says stocks are currently undervalued. But, according to the company, “revenue growth will accelerate in Q2 due to reduced competition, the resumption of Prime 1-day/same-day perks, and price increases on Prime and FBA through 2022.”
The forecast predicts that Amazon’s spending will decline after two years of significant growth and increase its operating profit margins by 100 basis points. Amazon has quadrupled the capacity of its fulfillment network since the Covid-19 outbreak. JP Morgan expects to see a return on this investment by 2024.
According to Wallet Investor, Amazon’s stock price will rise by more than $5,000 in the long term, according to its long-term estimate. In late December, an algorithm-based online prediction tool indicated that Amazon’s stock price would rise to $3,708,315 and $4,346,483 within the decade. At the end of 2025, the stock can be valued at $5,631.56 and $6,357,492 in March 2027.
CoinPriceForecast’s predictions suggested the stock could reach $6,360 in 2030. The 2022 average price was $3,854, while the 2025 average price was $4,720.
Is it a no-brainer to invest in Amazon in 2023?
From the company’s cost-cutting efforts and the success of its high-margin AWS, advertising, and marketplace divisions, it’s evident that Amazon has the potential to be much more lucrative than it now is.
Jassy is aware of the need to increase profitability since it will become more challenging to sustain the current sales growth rate when annual revenues surpass $500 billion. The stock is inexpensive after a drop of 50% and a market valuation of less than $1 trillion. Moreover, shares of Amazon are now priced at almost 40 times AWS’s expected $23 billion in operational profitability for the year.
The macroeconomic climate will determine whether or not the company will recover next year, but based on the stock price; the worst has already happened. Holding Amazon stock in 2023 might put you in a position to make a quick profit of 100% within the following two years. Any losses would be minimal, barring a severe economic downturn.
The online retail giant Amazon.com, Inc. also profits from cloud computing services. North America, International, and Amazon Web Services are its three divisions of operation (AWS). Retail sales of consumer goods and subscriptions are included in the North American and International markets (like Amazon Prime membership fees). In addition, AWS makes money through the worldwide selling of its services, including computing, storing data, and querying databases. Seattle native Jeffrey P. Bezos established the firm in July 1994.