Analyst Forecasts Upside Quarter for Amazon – Daniel L. Kurnos, an analyst at Benchmark, has reiterated a Buy rating on Amazon.com Inc (NASDAQ: AMZN) and raised the price target from $170 to $175. The company is expected to report its fourth-quarter fiscal 2023 results shortly.
While Wall Street’s focus has shifted from Amazon the retailer to the imminent Prime Video Ads launch, Kurnos predicts another strong e-commerce quarter with a 7% increase, as well as a 15% rise in services other than AWS and advertising. This is anticipated to be accompanied by further share gains and healthy margin expansion of 5.5% in operating income.
Moreover, Kurnos holds a unique perspective on the significance of the Prime Video Ads launch within the industry, contrary to most analysts. Consensus forecasts have thus far not accounted for Prime Video in their numbers.
Expectations for AWS appear reasonable, particularly with the potential impact of generative AI cloud costs on early reacceleration in the coming year.
Kurnos remains bullish on Amazon, despite its swift share recovery, emphasizing the potential of the upcoming quarter while maintaining a favorable view of the company.
Expectations and Price Action – Kurnos aligns with the street’s expectations for the quarter and anticipates being slightly ahead of the mid-point of guidance. He foresees a revenue upside across the retail board due to consumer sentiment and projected share gains, despite ongoing discounting. The AWS reacceleration timing might be a minor concern, though the consensus appears reasonable enough from the fourth quarter of fiscal 2023 through the fourth quarter of fiscal 2024 to avoid significant obstacles, unless there is an unexpected negative shift.
Kurnos projects fourth-quarter fiscal 2023 revenue and EPS of $165.49 billion (compared to the consensus of $165.90 billion) and $1.27 (versus the consensus of $1.30).
Current Stock Performance – As of the most recent check on Monday, AMZN shares were down 0.32% at $152.84.
