BofA lifts Amazon stock price target to $257 from $255

On Friday, BofA Securities analyst Justin Post increased the price target on Amazon.com (NASDAQ:AMZN) stock from $255.00 to $257.00, while reiterating a Buy rating. The adjustment follows Amazon’s reported revenue and profit, which surpassed expectations. The company’s revenue reached $187.8 billion, and profit hit $21.2 billion, exceeding the Street’s projections of $187.2 billion in revenue and $19.7 billion in profit. This financial performance was attributed to a robust holiday season that boosted retail sales. The strong results align with Amazon’s impressive 46.7% stock price gain over the past six months, with InvestingPro data showing the company maintains a "GREAT" financial health score of 3.16.

Post noted that Amazon’s North American retail margin climbed to 8.0%, the highest since 2004, driven by a 5% year-over-year reduction in Shipping Cost per Unit, indicating improved efficiency in cost to serve. Despite Amazon Web Services (AWS) revenue falling slightly short of expectations by $30 million at $28.8 billion, its stable growth rate of 19% was highlighted as favorable compared to the deceleration seen among peers. According to InvestingPro, Amazon’s overall revenue growth remains strong at 11.9% over the last twelve months, with analysts maintaining a strong buy consensus.

Amazon’s guidance for the first quarter of the year anticipates revenue between $151.0 billion and $155.5 billion with a profit range of $14 billion to $18 billion. This forecast is marginally below the Street’s expectations of $158.4 billion in revenue and $18.4 billion in profit. The company’s top-line has been impacted by foreign exchange rates and the absence of Leap Day, but even with these factors, the guidance implies a steady year-over-year growth of 11% at the higher end, excluding these items. Based on InvestingPro’s Fair Value analysis, Amazon currently appears slightly overvalued, though analysts maintain price targets ranging from $200 to $306, suggesting potential for further upside.

In other recent news, Amazon has been the focus of various analysts following its robust Q4 performance. Goldman Sachs, for instance, raised Amazon’s stock target to $255, emphasizing the company’s strong holiday season and a 19% year-over-year growth in AWS revenue. Despite facing significant foreign exchange challenges, Amazon management conveyed a positive outlook on the operating environment.

Citi analysts, on the other hand, slightly reduced Amazon’s stock price target to $273 but maintained a Buy rating. They expressed optimism regarding the 19% year-over-year growth of Amazon Web Services and the potential impact of substantial capital expenditure investments. Pivotal Research Group reiterated its Buy rating on Amazon shares, forecasting over 11% revenue compound annual growth rate over the next five years, driven by Amazon’s market share in the rapidly expanding cloud computing industry and potential growth in advertising revenue.

Canaccord Genuity maintained a Buy rating on Amazon shares and increased the price target to $280, noting that both Online and Physical Stores revenue surpassed expectations. They also highlighted Amazon’s significant expansion in its delivery capabilities and the consistent growth rate of AWS. DA Davidson analysts increased their price target on Amazon.com shares to $280, highlighting the impressive performance of Amazon’s Retail sector and the robust expansion of AWS, despite challenges from unfavorable foreign exchange rates. These are the recent developments in the analysts’ view of Amazon’s performance and future prospects.

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