Amazon reported second quarter earnings on Thursday that crushed analyst estimates.
Shares of Amazon popped as much as 6.4% on Friday as a number of updated Wall Street price targets began to breach the $4,000 level for the e-commerce giant.
Amazon saw a surge in retail business as more consumers migrated to online shopping amid the COVID-19 pandemic.
Here’s what three Wall Street analysts had to say about Amazon’s blockbuster earnings report.
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On Thursday, Amazon announced second quarter earnings that blew past Wall Street estimates as the company saw a surge in business due to the COVID-19 pandemic.
Shares of Amazon popped as much as 6.4% to $3,246.82 in Friday trades.
Here are the key numbers:
GAAP earnings per share: $10.30, versus analyst estimates of $1.50
Revenue: $88.91 billion, versus analyst estimates of $81.29 billion
AWS revenue: $10.81 billion, versus analyst estimates of $11.02 billion
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Here’s what 3 analysts had to say about Amazon’s blockbuster earnings report:
1. D.A. Davidson: “COVID-19 has been like injecting Amazon with a growth hormone”
Price target: $3,800
In a note published on Friday, D.A. Davidson increased its price target to $3,800 from $2,625, representing potential upside of 17% from current levels. Davidson highlighted that COVID-19 has driven sales expansion in ways that not even one-day shipping for Prime members could do.
The Wall Street firm highlighted that Amazon’s AWS cloud growth decelerated to 29% from 32.8% in the quarter, which is in line with what Microsoft reported for its Azure cloud unit in the second quarter.
Davidson highlighted two catalysts that it expects could drive Amazon shares higher over the next 12 months: stronger-than-expected results from Amazon’s AWS, as well as Amazon’s “increasing mix of highly-profitable third-party sales,” according to the note.
2. JPMorgan: “Amazon’s Prime ecosystem stood out this quarter”
Price target: $4,050
JPMorgan pointed to Amazon’s resilient strength in Prime amid the pandemic as one reason to boost its price target 35% to $4,050 from $3,000. “Prime member growth accelerated in the US & Int’l, existing member renewal rates increased, & Prime Video viewing hours doubled year-over-year,” JPMorgan highlighted.
The bank also highlighted Amazon’s strength in the grocery category, which has seen its delivery capacity increase 160% and saw overall grocery sales triple in the quarter, as consumers shifted to e-commerce and limited their trips to physical stores amid the COVID-19 pandemic.
Finally, JPMorgan added that Amazon’s shift of Prime Day from July to the fourth quarter should help smooth out demand for Amazon’s seasonally strong holiday quarter, help avoid warehouse capacity issues, and help revenue “re-accelerate” in the quarter.
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3. Bank of America: “AWS business not immune to economy; but strong backlog”
Price target: $3,560
Bank of America increased …read more
Source:: Business Insider