Amazon.com (AMZN) PT Raised to $200 at Canaccord Genuity; 'Stabilizing demand outweighs inflationary pressures'

Canaccord Genuity analyst Maria Ripps raised the price target on Amazon.com (NASDAQ: AMZN) to $200.00 (from $185.00) while maintaining a Buy rating following strong results, saying stabilizing demand outweighs inflationary pressures

The analyst commented, "Amazon reported solid Q2 results, with total revenue coming in ~2% above consensus and operating income well ahead of expectations. The eCommerce business showed signs of stabilizing, with growth improving sequentially on a constant currency basis despite the shift of Prime Day into 3Q22 vs. 2Q21 as the macro environment has not yet impacted demand materially, and AWS was once again a bright spot as growth remained strong, with the cloud business now approaching an ~$80B annualized revenue run rate. Operating income was above the upper end of the guidance range and included $4B of incremental costs vs. 2Q21 related to inflation and the deleveraging of some fulfillment operations. Q3 revenue guidance was slightly ahead of consensus at the midpoint, inclusive of a ~4pp headwind from FX, and the operating income outlook was below expectations as inflationary pressures and ongoing investments in AWS and Prime Video content offset an expected improvement in fulfillment costs, with the company noting it is slowing its 2022 and 2023 operations expansion plans to better align with expected customer demand. Shares of Amazon have remained volatile since the 20-1 stock split went into effect in late May, and while macro uncertainty is likely to continue over the near-term, the consistency of AWS and stabilizing eCommerce trends are encouraging signs as we head into the back half of the year."

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