Amazon (AMZN) Stock Is Up 50% in 2018 and May Not Be Done Yet; Top Analyst Weighs in Ahead of Earnings


‘Tis the season… for earnings reports. Monness’ top analyst Brian White is making his predictions for Amazon’s (AMZN) third-quarter earnings scheduled to be released this Thursday, after the closing bell. Furthermore, White reiterates a Buy rating on AMZN stock with a $2,300 price target, which represents a 30% upside from where the stock currently stands at $1,768.70.

“We expect Amazon to at least meet our 3Q:18 revenue estimate of $56.44 billion (up 29% YoY; Street is at $57.08 billion) and exceed our EPS projection of $2.50 (Street is at $3.12). Our 3Q:18 revenue estimate reflects 7% QoQ growth, below the 4-year average increase of 10%,” said White. “We are modeling 34% YoY sales growth in North America in 3Q:18 to $34.10 billion and international growth of 14% to $15.63 billion. Ad revenue has been a positive surprise this year and we believe a swing factor around profitability. Moreover, U.S. Prime membership fees rose to $119 from $99 for new members on May 11 (applied to renewals on 6/16), a positive tailwind,” White stated.

The analyst added, “For 4Q:18, we are projecting sales of $73.94 billion (up 22% YoY; Street is at $73.93 billion) and EPS of $6.46 (Street is at $5.90). Our 4Q:18 revenue forecast calls for a 31% QoQ increase and below the four-year average of up 39%.”

White points out that while other Internet giants like Facebook and Alphabet have been in hot water for privacy issues and allegations of political bias, Amazon has done a great job at keeping its head above it. Additionally, the company is applauded for supporting the U.S. military with technological initiatives and has garnered more good press after raising the minimum wage for employees to $15 per hour.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian White has a yearly average return of 16.6% and a 64% success rate. White has a 2.9% average return when recommending AMZN, and is ranked #89 out of 4,887 analysts.

If you’d use TipRanks to check how the stock is doing well on the Street, you’d find that the rest of the analysts are bullish on the stock, too. Based on 41 analysts polled in the last 3 months, 40 rate a Buy on Amazon stock while only 1 recommends a Hold. The 12-month average price target stands at $2,201.30, marking a 23% upside from where the stock is currently trading. (See AMZN’s price targets and analyst ratings on TipRanks)

 

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