7 Takeaways from Amazon.com's (AMZN) Everything Quarter, PT to $4,200 at Morgan Stanley

February 3, 2021 5:04 AM EST
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Price: $3,399.44 +0.60%

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    55 Buy, 3 Hold, 1 Sell

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(Updated - February 3, 2021 7:53 AM EST)

Morgan Stanley analyst Brian Nowak raised the price target on Amazon.com (NASDAQ: AMZN) to $4,200.00 (from $3,900.00) while maintaining a Overweight rating after the company reported earnings, announced Bezos' transition and indicated a core retail inflection that will likely drive upward revisions even if growth decelerates. He offered 7 thoughts on the report:

1) Bezos is not completely disengaging despite Amazon's deep bench. His replacement, Andy Jassy
has been with the company for over 20 years, built AWS and understands the culture and execution standards

2) AMZN’s core retail business continues to benefit from and drive the global e-commerce inflection as ~$113bn of 4Q retail (non AWS) revenue came in 3% better than expected and $3.3bn of 4Q retail EBIT was also ~$1.4bn better than modeled.

3) The $106bn top end of 1Q revenue guidance was ~8% better than modeled indicating higher volumes are leading to higher profitability

4) Scale continues to drive better top and bottom-line international results as $363mn of 4Q EBIT came in better than expected

5) One-day delivery is the next driver to solidify and further AMZN's share gains

6) AWS remains strong with backlog accelerating

7) "Other" revenue (where advertising is recorded) accelerated to 66% Y/Y growth, likely driven by continued product improvements and higher international adoption

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