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Will Amazon Post a Record Q1?

Chris Lange

Published: April 30, 2020 10:49 am

Amazon.com Inc. (NASDAQ: AMZN) is scheduled to release its first-quarter financial results after the markets close on Thursday. The consensus estimates call for $6.25 in earnings per share (EPS) and $73.61 billion in revenue. The same period of last year reportedly had $7.09 in EPS and $59.7 billion in revenue.

Earlier this week Credit Suisse reiterated its Outperform rating and raised its price target to $2,800 from $2,400. The firm 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.

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.

Excluding Thursday’s move, Amazon stock had outperformed the S&P 500 and Dow Jones industrial average with a gain of over 28% year to date. In the past 52 weeks, the share price was only up about 23%.

A few other analysts weighed in on Amazon prior to the release:

• Citigroup has a Buy rating with a $2,700 price target.
• Wolfe Research has a Sell rating and a $1,987 price target.
• Wells Fargo’s Buy rating comes with a $2,725 target price.
• Oppenheimer rates it as Outperform with a $2,700 price target.
• RBC has a Buy rating.

Amazon stock traded up over 2% at $2,437.43 on Thursday, in a 52-week range of $1,626.03 to $2,461.00. The consensus price target is $2,537.63.