Technology

Why Analysts Are Chasing Amazon Price Targets So Much Higher

Paul Ausick

Published: July 31, 2016 10:20 am

Last Updated: January 13, 2020 5:05 am

Amazon.com Inc. (NASDAQ: AMZN) got a head start on lifting its stock price before it even reported second-quarter results after the closing bell on Thursday. Shares traded up about 2% for the day before the earnings report and added more on top of that Friday.

Earnings per share topped the consensus estimate by $0.67 and revenue estimates by $850 million. And while Amazon’s forecast for third-quarter operating income of $50 million to $650 million is essentially information-free, it does show that Amazon plans to post a profit again. Not so long ago, the big revenue numbers more often wound up as a net loss than a profit.

The online retailer has carved out the top spot in the e-commerce sphere. While Wal-Mart Stores Inc. (NYSE: WMT) is gamely trying to catch up, there is little reason to expect any change in the pecking order anytime soon.

The company’s Amazon Web Service and Prime delivery service are absolutely killing it. Brick-and-mortar retailers’ single biggest advantage — instant gratification — is slowly being eroded by Amazon’s same-day and two-day deliveries.

And analysts have noticed. Jefferies reiterated its Buy rating and raised its price target from $865 to $950. Merrill Lynch reiterated its Buy rating and raised its price objective from $840 to $860, and Credit Suisse reiterated its Outperform rating and raised its target from $880 to $920.

There were many more analyst calls as well:

• Baird raised its price target from $800 to $850 and rates the stock Outperform.
• BMO lifted its price target from $800 to $875 and also rates the stock Outperform.
• Canaccord Genuity raised its price target from $765 to $825.
• Citigroup increased its price target from $780 to $870.
• Cowen raised its price target from $830 to $900.
• Deutsche Bank’s price target went from $900 to $985, and it rates the stock a Buy.
• Goldman Sachs boosted its price target from $900 to $920 with a Buy rating.
• Jefferies raised its price target from $865 to $950 and rates the shares a Buy.
• JMP lifted its price target from $775 to $840.
• JPMorgan raised its price target from $908 to $925.
• Macquarie increased its target from $760 to $875 and rates the stock Outperform.
• Mizuho Securities raised its price target from $810 to $855.
• Pacific Crest lifted its price target from $820 to $847.
• Piper Jaffray raised its price target from $800 to $900.
• Raymond James increased its price target from $770 to $900 and rates the stock Outperform.
• RBC raised its price target from $800 to $840.
• SunTrust Robinson boosted its price target from $775 to $800 with a Neutral rating.
• UBS raised its price target from $785 to $900 with a Buy rating.
• Wedbush raised its price target to $900 and rates the stock Outperform.

Amazon stock closed at $758.81 on Friday, up 0.8% for the day, after posting a new 52-week high of $766.00. The 52-week low is $451.00, and the consensus 12-month price target is $814.59, although that may not yet include recently announced changes.