Amazon.com, Inc. (NASDAQ:AMZN) is estimated to release fourth-quarter earnings for 2016 on January 26th. Ahead of the print, Oppenheimer analyst Jason Helfstein reiterates an Outperform rating on shares of AMZN with a $900 price target, which represents an 11% increase from where the stock is currently trading.
Though the analyst anticipates a rocky near-term for the e-commerce and online auction leader, he sees this as an opportunity for investors. Moreover, Helfstein believes, “Robust holiday spending bodes well for strong 4Q growth,” subsequently boosting revenue by 2%. From the analyst’s eyes, a strong asset in AMZN’s favor is the Prime flywheel, which he praises for further developing the company’s “industry leadership.”
Helfstein predicts, “We expect increased volatility in AMZN shares around 4Q:16 earnings. While the valuation is within its historical range, we see risks to consensus margin estimates as we believe the Street is underestimating the impact of the recently announced investment cycle, which we estimate could last for 18 months. Meanwhile, we expect strong top-line US eCommerce performance, driven by continued share gains during the holiday and shopping season, and better than expected AWS margins, driven by server efficiency.”
Moving forward, “We would use extended weakness as a buying opportunity, with an eye toward improved Int’l margins in 2018,” Helfstein contends.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Jason Helfstein is ranked #299 out of 4,349 analysts. Helfstein has a 58% success rate and gains 7.8% in his annual returns. When recommending AMZN, Helfstein yields 36.2% in average profits on the stock.
TipRanks analytics demonstrate AMZN as a Strong Buy. Out of 32 analysts polled by TipRanks in the last 3 months, 30 are bullish on Amazon stock and 2 remain sidelined. With a return potential of nearly 18%, the stock’s consensus target price stands at $951.70.