Evercore Keeps Amazon.com (AMZN) on Top Pick and TAC Lists Ahead of Earnings: 'Attractive Risk/Reward Set-Up'

Evercore ISI analyst Mark Mahaney reiterated an Outperform rating and $190.00 price target on Amazon.com (NASDAQ: AMZN).

The analyst comments "Our View: Based on intra-quarter data points and our model sensitivity analysis, we view the Street’s Q3 Revenue (+11% Y/Y and +5% Q/Q), Operating Income (implying 5.3% margin) and AWS Revenue (+12.5% Y/Y and 4% Q/Q) estimates as reasonable, given our positive channel checks suggesting Cloud demand acceleration (in H2 and into ’24). As for Q4, we view the Street’s Total Revenue (12% Y/Y, 18% Q/Q) and Operating Income estimates (implying 5.2% margin) as at least bracketable. Overall, we see an attractive risk-reward set-up for Amazon heading into the Q3 print, given very reasonable Street estimates for topline growth and N.A. Retail Op margin assumptions (3% margin for Q3), relatively conservative buyside expectations for AWS growth, and our checks that suggest a recovering/accelerating Cloud spending environment that should persist into ’24 (which we believe the market is not giving AMZN full credit for), and improving fulfillment capacity utilization (i.e. Retail Op Margin expansion). Our Stock Call: We have a Tactical Outperform on AMZN AND it’s our Top Large Cap ‘Net Long. We particularly like the riskreward heading into the Q3 EPS print, given reasonably low expectations. We continue to view ’22 as the Tripple Trough Year for AMZN – Trough Multiple, Trough Revenue Growth & Trough Margins. Classic DHQ."

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 $126.56 yesterday.

You May Also Be Interested In

• Goldman Sachs Upgrades Plains GP Holdings, L.P (PAGP) to Neutral
• The Quest to Power AI Is Going Underground
• Bernstein SocGen Group Starts Terawulf Inc. (WULF) at Outperform