Amazon Price Targets Raised by Analysts Ahead of Earnings

Researchers impressed with Amazon's performance during the coronavirus pandemic.
Author:
Publish date:

Amazon.com  (AMZN) - Get Report saw several analysts lift their share-price targets ahead of the online retail giant’s second-quarter earnings report, scheduled for Thursday.

The coronavirus pandemic has boosted the company’s performance, as consumers stuck at home are doing their shopping online.

Bank of America raised its price target to $3,280 from $3,000, Wells Fargo hiked its target to $3,600 from $3,000 and Wedbush went to $3,500 from $3,050, maintaining its outperform rating.

Amazon shares recently traded at $3,044.27, up 1.2%. The stock has jumped 65% so far this year, compared to 17% for the Nasdaq Composite.

As for analyst views, “Covid-19 and the stay-at-home response for many consumers should result in substantial revenue upside in Q2, with the company’s burgeoning grocery business likely a key driver,” Wedbush analyst Michael Pachter wrote in a commentary. 

And that’s likely to continue, he said. “We expect many consumers to remain reticent to return to normal consumption patterns so long as the threat of infection is meaningful.”

Amazon has said it's spending about $4 billion on efforts related to employee safety amid the coronavirus pandemic.  That's a smart move, Pachter said. “And [we] think that the goodwill engendered with its employees by increasing their wages will pay dividends in the future, when things return to normal.”

To be sure, “despite our optimism on top-line performance in Q2, we need to see the profitability trends and operating leverage (if any) highlighted in Q2 results and Q3 guidance (and potentially beyond) before we adjust our EBITDA estimates for future periods,” he said.

Amazon.com is expected to report adjusted net income of $2.6 billion, or $1.42 a share, on sales of $81.2 billion after the market closes on Thursday, based on a FactSet survey of 44 analysts.

Tags
terms:
Retail