Amazon (AMZN) Stock Is a Buy Ahead of Earnings: Top Analyst


In late December, Amazon (AMZN) shared some upbeat news about its holiday sales. The e-commerce giant said that it sold more items and raked in more revenue than it ever has during the busy holiday period, adding that the company’s Prime subscription service had a lot to do with this increase. The company has shipped more than a billion items during the holiday season in the U.S. through Prime alone.

However, none of these details can confirm Amazon is poised to deliver better-than-expected sales in its fourth quarter. Investors should expect an update on sales when the company reports its quarterly results on Thursday, February 7. To help you prepare, here is what Oppenheimer’s top analyst Jason Helfstein is expecting:

“We believe AMZN exceeded its domestic gross profit estimates on strong macro holiday sales and continued share gains, supported by Adobe Insights and Similarweb. In particular, brick & mortar retailers suffered, as consumers shifted online shopping behavior to apps vs. browser/mobile-web. Meanwhile, AMZN’s gross profit growth vs. brick & mortar outperformance has been widening, driven by 3P and advertising. However, following UK-based ASOS’ miss, investors should expect slower international growth at AMZN. AWS revenue and margin growth is expected to remain at similar levels on software adoption and capex efficiency.”

Bottom line: Helfstein reiterates an Outperform rating on AMZN stock, with a price target of $2,020, which represents a potential upside of 22% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, Helfstein has a yearly average return of 14.2% and a 58% success rate. Helfstein has a 43.3% average return when recommending AMZN, and is ranked #98 out of 5142 analysts.

Overall, when it comes to Wall Street’s bet, the odds are on this retail giant, with TipRanks analytics showcasing AMZN as a Strong Buy. Out of  40 analysts polled in the last 3 months, 38 are bullish on Amazon stock while only 2 remain sidelined. With a return potential of nearly 30%, the stock’s consensus target price stands at $2,135. (See AMZN’s price targets and analyst ratings on TipRanks)

 

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