Amazon.com (AMZN) experienced a price-target increase from an analyst on Monday, who referenced data indicating robust consumer spending alongside encouraging trends in the company’s cloud sector. Shares of Amazon dipped slightly in early trading on Monday as they move towards a potential flat base buy point.
Truist analyst Youssef Squali raised the firm’s price target for Amazon stock to 265 from 230 and confirmed a buy rating in a report to clients on Monday.
“We believe North American revenue is closely aligning with consensus estimates quarter-to-date (up to Sept. 24), showcasing a resilient consumer, ongoing growth in advertising revenue, accelerated growth at AWS, and enhanced operating margins year-over-year,” Squali mentioned to clients. “This is happening even as the company makes significant investments in AI, AWS, logistics, and Project Kuiper.”
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On the stock market today, Amazon stock fell by less than 1% to finish at 186.33. The stock is forming a consolidation pattern with a 201.20 buy point, per MarketSurge.
Closing Out Q3
Monday marks the conclusion of Amazon’s third quarter. The company is anticipated to announce Q3 earnings later in October. Analysts expect, on average, Amazon’s revenue to increase by 9.9% to $157.2 billion, according to FactSet.
Squali noted that Truist Card data suggests Amazon’s U.S. revenue is aligning with the current consensus of $95.4 billion for the third quarter. This gives the analyst assurance that Amazon is on track to meet overall consensus revenue forecasts, the report mentioned.
The revised price target of 265 for Amazon stock reflects Truist’s projections for the company’s fiscal year 2025, compared to its fiscal year 2024 target of 230.
“Amazon is currently our preferred mega-cap stock as it continues to capture more of the global e-commerce market and enhance its value proposition for both merchants and consumers,” Squali stated. “It is also one of the top avenues to invest in cloud services, AI, digital advertising, and global logistics.”
Amazon stock dropped after its second quarter earnings report in early August, which revealed lower-than-expected revenue. The results raised concerns among some investors about a potential trend of consumers opting for lower prices, which may impact improvements in Amazon’s retail margins.
Truist analysts anticipate that Amazon’s capital expenditures will “remain high” as the company enhances its AI-related infrastructure. The Project Kuiper satellite internet initiative could also affect Amazon’s North American margins, the Truist report added, as the company ramp-ups satellite launches. However, Squali noted that this endeavor could yield benefits “over the medium/long term.”
Amazon Stock: Consolidation Buy Point
With its recent performance, Amazon stock is working up the right side of a 12-week consolidation pattern, even amidst a recent four-day downtrend.
MarketSurge has identified a 201.20 buy point on Amazon’s daily chart, which would indicate a return to the highs the e-commerce leader attained in early July before experiencing a downturn.
In a positive indication, Amazon bounced back above its 200-day and 50-day moving averages in early September. Shares have remained above these levels since then.
Amazon stock has appreciated more than 20% this year following an impressive 81% surge in 2023.
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