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Amazon.com (AMZN) Sell-Off on EPS 'Well Overdone' - Goldman Sachs

October 27, 2022 5:02 PM EDT
Get Alerts AMZN Hot Sheet
Price: $180.38 +0.31%

Rating Summary:
    65 Buy, 5 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Goldman Sachs analyst Eric Sheridan weighed in on Amazon.com (NASDAQ: AMZN) following earnings, saying the 20% sell-off is "well overdone."

The analyst commented, "With Amazon’s stock down ~20% in after-hours trading, we see this reaction as well overdone in terms of its reported results & guidance when compared to investors’ expectations relative to Street estimates in the run up to this earnings report. We would have expected a small negative reaction compared to this pronounced downtick for a stock that has already consistently underperformed the market in the last few years. We see the overall eCommerce revenue trajectory in-line with our pre-earnings expectations, AWS’s f/x neutral 28% growth as in-line with lowered expectations (post GOOGL/MSFT results earlier this week) and their advertising vertical provided a nice upside surprise. Both Q3’22 Operating Income and the high end of the forward Operating Income guide can be perceived as less than expected and questions will likely be asked on the earnings call about the various inputs in eCommerce margin trajectory (not only in 2H’22 but into 2023) with a sharp focus on the ramp to improved fulfillment center capacity utilization. In addition, we would expect the focus to remain on the current macro environment (especially any consumer/enterprise spending impacts globally). Lastly, there will remain a question about how much of a revenue deceleration is implied for AWS inside Amazon’s consolidated reported revenue guidance for Q4’22 (which may also be weighing on the shares). Amazon did not purchase any shares in the quarter (which also could be taken as a small negative from investors)."

The analyst reiterated a Buy rating and $175.00 price target on AMZN for the time being.

For an analyst ratings summary and ratings history on Amazon.com click here. For more ratings news on Amazon.com click here.

Shares of Amazon.com closed at $115.66 yesterday.



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