In a research report released Friday, Cantor analyst Youssef Squali reiterated a Buy rating on Amazon (NASDAQ:AMZN) with a price target of $365, which implies an upside of 18% from current levels. The report comes ahead of the company’s fourth-quarter results, which will be reported on Thursday, January 29.
Squali wrote, “We expect solid results out of Amazon with ~18% revenue growth. Intra-quarter data have indicated that 4Q:14 Y/Y growth in 3P same store sales (SSS) was robust. However, a weak Europe, higher investments, and continuous price cuts at AWS are likely to keep a lid on profitability, even as the company grows materially faster than the market. We also expect F/X to take a bite out of 4Q results/outlook.”
The analyst continued, “We expect revenues of $30.17B, up 18% Y/Y vs. (FactSet) consensus estimate of $29.68B. Guidance is for $27.30-30.30B in revenue. We expect $0.44 in GAAP EPS vs. consensus’ $0.21. We note that the range for EPS estimates is usually very large, and for this quarter as well, varying from $(0.41) to $0.83/share. We expect F/X to result in a revenue headwind of ~$282M in 4Q:14 (vs. our expectations) and less than a penny impact to EPS. F/ X should result in a 340bps hit to Y/Y top line growth vs. mgt’s assumption for 250bps.”