You would have to try very hard to scare top analyst Youssef Squali away from betting on Amazon (AMZN) this Halloween. As the e-commerce giant prepares to release its third-quarter earnings this afternoon, the SunTrust analyst is making predictions about how the company performed in Q3. Squali maintains a positive attitude toward the company’s stock, rating it a Buy with a price target of $2,150, which implies 24% upside from current levels.
Is it worth listening to this analyst? Apparently yes. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Squali has a yearly average return of 19.7% and a 66% success rate. Squali has a 96% average return when recommending AMZN, and is ranked #61 out of 4,887 analysts.
Heading into the print, Squali expects a strong performance from the retail giant, with about 31% in year-over-year revenue growth. The analyst predicts the ecommerce department doubled in growth, along with share gains from retail, a robust 3P, Amazon Web Services and a growing online ad segment. He notes research shows the growth of ecommerce for the third quarter comes in tandem with a strong macroeconomic climate. Squali forecasts AMZN’s Q3 revenue to be $57,17 billion.
“We expect organic growth ex. WFM to be 25% Y/Y (20 pts from ecommerce biz, 5 pts from AWS), materially higher than the mid-teens for overall ecommerce, driven by the +100M paid Prime members globally and Prime Day. We expect EPS of $3.76 as the company continues to aggressively invest in infrastructure and internal expansion, including India,” Squali said.
The analyst believes one major proof of evidence for ecommerce success is the closure of proper stores. 2017 was record-breaking for announcements of store closures. There were 7,066 announcements and 4,799 in 2018 up until this point with 2,155 YTD 2018 vs. 2,654 during the same time period last year, according to Coresight Research. Times are a’changin, aren’t they? If you’re someone who gets a kick out of buying your toilet paper in the store, it might be a good time to start looking at your TP options online.
Most analysts back Squali’s confident take on the retail titan, as TipRanks analytics showcase AMZN as a Strong Buy. Based on 41 analysts polled in the last 3 months, 40 are bullish on Amazon stock while only 1 remains sidelined. The 12-month average price target stands at $2,198.86, marking a nearly 25% upside from where the stock is currently trading. (See AMZN’s price targets and analyst ratings on TipRanks)