‘Gearing up for a big 4Q with fulfillment and COVID investment’: Here’s what 4 Wall Street analysts had to say about Amazon’s 3rd-quarter earnings report



  • Amazon posted a robust third-quarter earnings beat on Thursday, however its inventory suffered in Friday trades on a tepid fourth-quarter outlook.
  • Amazon CEO Jeff Bezos stated clients are buying early for his or her vacation items, “which is simply one of many indicators that that is going to be an unprecedented vacation season.”
  • This is what 4 Wall Avenue analysts needed to say about Amazon’s Third-quarter earnings report.
  • Visit Business Insider’s homepage for more stories.

Amazon third-quarter earnings report simply beat analyst estimates, however a tepid fourth-quarter forecast hurt the stock in Friday trades.

Whereas Amazon’s fourth-quarter income outlook bested analyst estimates, working revenue forecasts fell flat, under analyst consensus by greater than $1 billion.

Nonetheless, Amazon CEO Jeff Bezos is bullish on the 4th-quarter and vacation buying season, saying that clients are buying early for his or her vacation items, “which is simply one of many indicators that that is going to be an unprecedented vacation season.”

This is what 4 Wall Avenue analysts needed to say about Amazon’s Third-quarter earnings report.

Learn extra:The founder of a volatility-hedging program that gained 3,700% in the March crash says ‘the opportunity is ripe’ for another chaotic market event – and shares how investors can take advantage of it.

1. Goldman Sachs

Ranking:Purchase
Worth Goal:$4,200

“We proceed to imagine that the long run steepening of Amazon’s development curve pushed by the acceleration of shopper adoption of ecommerce and enterprise adoption in cloud computing, enabled by the corporate’s investments in success and infrastructure, and the related excessive returns are prone to drive share value outperformance nicely past the present disaster,” Goldman Sachs stated.

2. JPMorgan

Ranking:Chubby
Worth Goal:$4,100

JPMorgan was impressed with Amazon’s earnings report, and rewarded the corporate with a $50 enhance to its value goal to $4,100. JPMorgan charges Amazon as a “high thought.”

“General, AMZN exceeded excessive expectations on the top-line, & whereas we acknowledge the fee is excessive, AMZN is making vital investments to maintain up with elevated demand and ship for purchasers in a method that few, if any, others can by way of this time interval.We imagine the advantages to AMZN will repay by way of driving elevated buyer loyalty(as evidenced the final 2 qtrs w/larger Prime retention), accelerated e-commerce adoption, & sustainable penetration lifts in rising classes resembling grocery,” JPMorgan stated.

Learn extra:Famed short-seller Andrew Left told us about his bullish positions in a magic-mushroom company and a COVID-19 test maker – and explained why he’s now all-in on an online retailer he bet against barely a year ago

3. Financial institution of America

Ranking:Purchase
Worth Goal:$3,650

Financial institution of America applauded Amazon’s earnings report with a $50 enhance to its value goal to $3,650 from $3,600.

“Amazon continues to put money into its supply infrastructure, with $12bn in capital spending in Q3 alone (and $30bn+ YTD), constructing a formidable long-term logistics asset,” BofA stated.

“3Q outcomes proceed to exhibit the sturdy profitability potential within the mannequin when revenues match investments with belongings working at capability. With COVID instances rising, we like Amazon’s 4Q setup with sturdy vacation volumes probably driving margins nicely above steerage. Amazon stays finest positioned for the On-line retail and Cloud shifts,” BofA concluded.

4. Stifel

Ranking:Purchase
Worth Goal: $3,500

“Amazon is nicely positioned from a capability standpoint heading into the vacation season, following a profitable take a look at over Prime Day and the elevated funding in success. Amazon stays among the finest positioned firms for the acceleration to digital in retail and the transition to cloud companies,” Stifel stated.

“The power to deal with retail demand by way of the vacation season is a key query/concern and was a number one subject of debate on the decision. Capability will probably be tight throughout the trade, however the firm feels good about its capability place given the funding in success (50% enhance in community footage this yr) and folks, many targeted on the transportation leg. QTD over 100,000 extra workers has been added,” Stifel stated.

“We imagine Amazon is nicely positioned to proceed to learn from the present secular shifts in eCommerce
and cloud computing and is well-prepared for the vacation season as plans to put money into capability have been in movement previous to the pandemic,” Stifel concluded.

Learn extra:Goldman Sachs shares 10 high-growth stocks it newly recommends buying as investors reward companies that channel cash to grow their businesses in 2021



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