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Shares of Amazon.com were trading strongly higher on Monday in a pair of bullish analyst notes as Wall Street raises expectations ahead of the company’s earnings report to be released on July 30.
The company is an obvious beneficiary of both the rapid acceleration of enterprise cloud computing and the consumer adoption of online shopping in the Covid-19 era. While Amazon warned it could spend all of its profits, and then some, responding to Covid-related issues in the June quarter, there is a growing expectation that the two mega-trends driving the business will produce better-than-expected growth in the coming years. quarters.
Goldman Sachs analyst Heather Bellini repeated her Amazon Buy rating (ticker: AMZN) on Monday morning, raising her stock price target to a high of $ 3,800 on the street, from $ 3,000. It also increased its revenue outlook for this year and each of the next two years, although it lowered its outlook for margins and earnings per share to reflect Covid-related expenses and an increase in infrastructure spending to accommodate more growth. fast in both retail and retail. Amazon web services.
By 2020, he now sees revenue of $ 361.5 billion, 3.4% more than his previous estimate of $ 349.6 billion, and well ahead of the current Street consensus of $ 347.8 billion. Citing indications of strength in the third-party business, he now sees the company’s e-commerce revenue in North America increase 48% in the June quarter, up from 33% previously estimated.
Meanwhile, MKM analyst Rohit Kulkarni also repeated a buy rating on the stock, while raising its target price to $ 3,350, from $ 2,525. Like Bellini, he also increased his revenue targets for both this year and next.
“As the pandemic has accelerated the shift to online shopping and cloud computing, we believe Amazon is the best beneficiary of these secular trends for years to come,” Kulkarni wrote in a research note. “Amazon has been the best-performing megacap this year, and recently bearish investors have highlighted several arguments to us recently, thinking that ‘good news worth several quarters now comes at a price.’ … We think it’s a proposition. Risky betting against Amazon, however, would not surprise us if investors focused on the short term seek to step aside before profit. ”
However, for investors with a time horizon of at least six months, he advises buying the shares on “mini-dives.”
Amazon on Monday rose 4% to $ 3,081.77. For the year to date, shares rose 67%.
Write to Eric J. Savitz at [email protected]
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