Technology
Why Analysts Are Chasing Amazon Price Targets So Much Higher
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Amazon.com Inc. (NASDAQ: AMZN) got a head start on lifting its stock price before it even reported second-quarter results after the closing bell on Thursday. Shares traded up about 2% for the day before the earnings report and added more on top of that Friday.
Earnings per share topped the consensus estimate by $0.67 and revenue estimates by $850 million. And while Amazon’s forecast for third-quarter operating income of $50 million to $650 million is essentially information-free, it does show that Amazon plans to post a profit again. Not so long ago, the big revenue numbers more often wound up as a net loss than a profit.
The online retailer has carved out the top spot in the e-commerce sphere. While Wal-Mart Stores Inc. (NYSE: WMT) is gamely trying to catch up, there is little reason to expect any change in the pecking order anytime soon.
The company’s Amazon Web Service and Prime delivery service are absolutely killing it. Brick-and-mortar retailers’ single biggest advantage — instant gratification — is slowly being eroded by Amazon’s same-day and two-day deliveries.
And analysts have noticed. Jefferies reiterated its Buy rating and raised its price target from $865 to $950. Merrill Lynch reiterated its Buy rating and raised its price objective from $840 to $860, and Credit Suisse reiterated its Outperform rating and raised its target from $880 to $920.
There were many more analyst calls as well:
Amazon stock closed at $758.81 on Friday, up 0.8% for the day, after posting a new 52-week high of $766.00. The 52-week low is $451.00, and the consensus 12-month price target is $814.59, although that may not yet include recently announced changes.
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