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Morning Bell With Jim Cramer: 'Don't Short Amazon'

TheStreet's Jim Cramer takes a look at Amazon's latest earnings and gives investors tips on the importance of analysts' price targets.

Stock futures were mostly lower Friday as investors weighed the prospect of still-solid economic growth against the prospect of the Delta variant of COVID-19 putting a dent in the final half of the year.

TheStreet's Jim Cramer turned his attention to retail giant Amazon  (AMZN) - Get Amazon.com, Inc. Report, which posted stronger-than-expected second quarter earnings Thursday, but sales missed Wall Street's sales expectations.

Amazon: 'Let the flippers get out'

Cramer told investors that tip-off to avoiding a company is when the analyst keeps a buy rating, but doesn't raise the price target.

In Amazon's case, a number analysts cut their price targets falling the earnings report.

"Price targets lowered en mass for Amazon," Cramer tweeted Friday. "As I said last night on @MadMoneyOnCNBC when you get PT's lowered do not go near it short-term and let the flippers get out."

UBS' Michael Lasser, who lowered his price target to $4,020 from $4,350 but kept a buy rating on the shares. 

Amazon spending still accounted for 44% of all incremental online spend in the quarter however, which is well ahead of the 36% that it has typically accounted for over the past 5 years, Lasser said, according to the Fly.

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Raymond James analyst Aaron Kessler lowered his price target on Amazon.com to $3,900 from $4,125, while keeping an outperform rating.

Cramer: 'Price targets boosts tell the truth'

Cramer encouraged his viewers to do their homework when researching a company, noting that company conference calls "are treasure troves on vital information."

He also stressed the importance of analysts' price targets.

"Price target boosts tell you the truth," he said. "Price target truths lead you in the right direction."

Cramer said that while both Facebook FB and PayPal PYPL had disappointing quarters, several analysts raised their price targets. The analysts, Cramer said, know these companies well and adjust their price targets according.

With enough price target boosts, he said, earnings season "becomes like a trampoline.

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