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Analysts Keep Raising Expectations Ahead of Amazon's Earnings

Chris Lange

Published: April 27, 2020 11:54 am

Amazon.com Inc. (NASDAQ: AMZN) is set to release its first-quarter financial results later this week, like a slew of other big names and some Dow Jones industrial stocks. Amazon has been a big beneficiary of the coronavirus outbreak, with its increased business and its shares at all-time highs. Now analysts are offering their two cents before the report comes out.

Credit Suisse believes that it sees signs that Amazon is being crushed with demand, but this was clear at the outset of the health crisis. As a result, the brokerage firm thinks Amazon ultimately will look back on this event as one that spurred faster adoption for some of the more online-underpenetrated retail categories. Food/groceries remain the biggest pool of offline dollars left for online adoption, and about seven years after broadly launching Amazon Fresh, Credit Suisse believes this is the company’s moment to accelerate shareholder value creation as consumers who were on the fence on ordering groceries via Prime Now and/or Amazon Fresh should develop a higher comfort level if not an outright purchasing habit. Credit Suisse reiterated its Outperform rating and raised its price target to $2,800 from $2,400.

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SunTrust Banks reiterated a Buy rating and raised its price target to $2,900 from $2,600. The firm detailed in its report:

We expect very strong top line results, driven by Amazon’s market leadership in ecommerce and COVID-19 catalyzing large shift in consumer spending from offline to online. While some upside is likely priced in, we believe the market still under appreciates Amazon’s dominance in two large, secular growth industries in ecom and cloud, and emerging position in online advertising. Though not immune to prolonged macro-economic weakness, we expect AMZN to still outperform relative to the overall market.

Merrill Lynch reiterated a Buy rating but left its price objective unchanged at $2,480. For the first quarter, the firm estimates revenue and EBITDA of $73.4 billion and $10.5 billion respectively. This compares with Wall Street consensus estimates of $73.0 billion and $11.3 billion for revenue and EBITDA, respectively.

Here’s what a few other analysts had to say:

• Oppenheimer reiterated it as Outperform and raised its target to $2,700 from $2,400.
• Stifel reiterated its Buy rating and raised its target price to $2,600 from $2,400.
• Goldman Sachs reiterated it as Buy and raised its price target from $2,600 to $2,900.

Amazon stock traded at $2,420.69 on Monday, in a 52-week range of $1,626.03 to $2,461.00. The consensus price target is $2,488.13.