Amazon.com (AMZN) PT Raised to $225 at Loop Capital
Loop Capital analyst Rob Sanderson raised the price target on Amazon.com (NASDAQ: AMZN) to $225.00 (from $215.00) while maintaining a Buy rating.
The analyst commented: "We are updating our forecast for Amazon following a very strong 1Q report for both the retail and public cloud businesses. The retail segment delivered more than half of the profit upside driven by continued strength in services and normalization in cost-to-serve. Consensus is still mis-modeling the recovery pretty meaningfully (details below) and we expect profit upside
will continue for a long time before consensus catches up. Our forecast is about 50bps higher than consensus for retail segment margin in both 2024 and 2025 but this is still very far from what “normal” implies in our analysis. AWS margin hit an all-time high, benefiting from revenue acceleration against cost controls and boosted by the accounting change on useful life of servers. We forecast a steeper margin normalization on AWS than just D&A passthrough on our higher capex outlook. GenAI is an exciting new growth vector and already contributing at a multi-billion-dollar revenue run rate. We are raising our PT to $225 on the same SOTP methodology as previous on higher estimates. Amazon remains our favorite of the mega-cap stocks in our coverage universe."