JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Thursday, Bernstein analysts, led by Nikhil Devnani, increased their price target on Amazon.com (NASDAQ:AMZN) shares to $280 from the previous target of $265, while maintaining an Outperform rating on the stock. The adjustment follows Amazon’s strong third-quarter performance and a successful Re:Invent event held in November. According to InvestingPro data, Amazon’s stock is trading near its 52-week high of $241.77, with a remarkable 49% return over the past year. The company’s current market capitalization stands at $2.49 trillion.
The analysts highlighted Amazon as the most favored name in the Internet sector and their top pick, citing positive sentiment bolstered by the company’s recent achievements. Amazon Web Services (AWS) is anticipated to sustain its acceleration into the fourth quarter. Additionally, the retail segment is expected to gain from a robust holiday shopping season, with increases in sponsored and branded advertising revenues. InvestingPro analysis shows Amazon’s strong financial health with an overall score of 3.2/5, supported by revenue growth of ~12% and a healthy gross profit margin of 48.4%.
Amazon’s Thursday Night Football broadcast also contributed to the positive outlook, with a 13% year-over-year increase in viewership. Operating income (OI) is projected to hit the upper range of the company’s guidance, benefiting from foreign exchange (FX) tailwinds and seasonal leverage in the retail sector.
While Bernstein analysts have slightly reduced their Q4 AWS revenue estimate based on signals from their SSO engagement data, they have made a modest adjustment to their retail revenue estimates to account for an approximate 40 basis points FX headwind due to the strengthening U.S. dollar. Nevertheless, they anticipate a potential increase in domestic retail operating leverage during the high-utilization fourth quarter. The analysts have also revised their margin estimates for AWS and retail upwards, taking into account a roughly 100 basis points FX tailwind and seasonal leverage, respectively, which should result in margins at the higher end of management’s guidance. For deeper insights into Amazon’s valuation and growth metrics, including 16 additional ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, Amazon has been the focus of several recent developments. JMP Securities has maintained a Market Outperform rating on Amazon with a steady price target of $285.00. The firm’s analysts have revised their growth expectations for Amazon’s cloud division, Amazon Web Services (AWS), in light of recent results from Microsoft (NASDAQ:MSFT)’s Intelligent Cloud segment.
Amazon is also facing a lawsuit alleging covert tracking of consumer movements via mobile devices using a piece of code known as Amazon Ads SDK. Additionally, Amazon has entered into a transaction agreement with Ranpak Holdings (NYSE:PACK) Corp., which includes the issuance of a warrant for Amazon to acquire up to 18,716,456 shares of Ranpak’s common stock.
The UK’s Competition and Markets Authority is considering an investigation into AWS over concerns of reduced competition in the UK cloud services market. These are recent developments that investors should be aware of.
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