Amazon's stock rose Thursday morning as Wall Street analysts were increasingly bullish about the ecommerce giant in advance of its earnings next week.
Amazon (AMZN), a major stock on the market, was up 2.5% today at 131.44. The morning session saw a high volume of trading.
Amazon will report earnings on Thursday. Analysts have given a positive preview of earnings in the run-up to this report.
Amazon Stock A Top Choice
Oppenheimer's new research report ranked Amazon as the top choice for 2024. Analyst Jason Helfstein stated that the company is exposed to affluent customers, has advertising opportunities and has "significant potential for improving e-commerce margins."
The Oppenheimer Report notes that Amazon shares have underperformed recently compared with Alphabet (GOOG), and Meta (META).
Helfstein reiterated that Amazon's stock was a performer and set the price target for 12 to 18 months at 170.
Tom Forte, Davidson analyst, reiterated a Buy rating for Amazon with a 150 price target. He believes that consumers spend more on live events and travel than on discretionary items. However, he also noted some positive signs for Amazon's Retail business.
Forte wrote: "First, we were encouraged to see that the company's seasonal hiring plans are robust, with (250,000) workers for the holidays compared to (150,000) in last year. Second, the company's Prime Big Deal Days held in October - only the second event in the company's history - outpaced the previous year.
Scott Devitt, Wedbush's analyst, reiterated his outperform rating of Amazon with a price target of $180 for the next 12 months.
Devitt, in a client note dated Oct. 18, wrote: "We believe the company is better positioned overall than investors fear. We see many catalysts coming as retail margins rise and AWS's (Amazon Web Services') growth accelerates despite easing comparisons."
Cloud Business: Beware
Stock analysts have shown caution when it comes to Amazon's AWS Cloud-Services. This division is Amazon's most important profit generator, but sales have slowed in recent months due to a slowdown in software spending.
UBS, for example, rates Amazon's stock as a buy with a price target of 178. Analyst Lloyd Walmsley, however, reduced that price target slightly this week citing possible short-term headwinds in cloud revenue.
Amazon's stock is struggling as it heads into earnings. Wedbush’s Devitt noted Amazon stock had lost 5.8% since Aug. 4, the day following its Q2 results. This compares to a Nasdaq Composite decline of 2.7% and a rise in megacap tech shares of 1.8%.
Amazon has been dealing with concerns over the cloud business as well as competition from Chinese ecommerce companies and the Federal Trade Commission’s antitrust lawsuit.
The earnings report next week will provide an opportunity to address some of these concerns. FactSet polled analysts who predict earnings per share of 58 cents on a revenue of $141.5 Billion. This represents a 107% increase in earnings and an 11.3% increase in sales.
Wall Street has a positive outlook on Amazon's stock. FactSet reports that 94% of the 54 Amazon analysts who follow the company have a buy rating.