Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Canaccord Genuity maintained a Buy rating on Amazon.com (NASDAQ:AMZN) shares and increased the price target to $280 from $265. The adjustment comes after Amazon reported its Q4 results, which showed total revenue in line with consensus and operating income exceeding expectations. According to InvestingPro data, Amazon’s stock is trading near its 52-week high of $242.52, with the company commanding a market capitalization of $2.51 trillion and maintaining a "GREAT" overall financial health score.
Maria Ripps, an analyst at Canaccord Genuity, noted that both Online and Physical Stores revenue surpassed expectations, with unit growth outpacing revenue growth. Amazon has also welcomed new brands such as Clinique, Estée Lauder, Oura Rings, and Armani Beauty. The company has significantly expanded its delivery capabilities, growing same-day delivery sites by 60% in 2024 and now reaching over 140 metropolitan areas. This expansion has contributed to Amazon’s impressive 11.93% year-over-year revenue growth, with total revenue reaching $620.13 billion in the last twelve months.
The e-commerce giant has seen a decline in per-unit transportation costs due to increased unit availability across more distribution points and the inclusion of more items in each delivery package. Amazon’s Advertising business grew by 18% during the quarter, while Amazon Web Services (AWS) maintained its growth rate of 19%, consistent with the previous quarter’s levels, despite facing tougher comparisons. Want deeper insights into Amazon’s performance metrics and growth potential? InvestingPro subscribers have access to over 15 exclusive ProTips and comprehensive financial analysis.
For Q1, Amazon’s revenue guidance was slightly below expectations, with the midpoint of the range approximately 2% under consensus. Operating income (OI) guidance was around 14% below expectations at the midpoint. This reflects, in part, the accelerated depreciation of technology that is becoming outdated more quickly, especially in the field of artificial intelligence (AI).
Capital expenditures (CapEx) reached $26 billion in the quarter, and this level of investment is anticipated to persist into 2025. The ongoing CapEx is driven by investments in AI to meet the increasing demand in this rapidly advancing sector.
In other recent news, Amazon.com has been the subject of several significant developments. DA Davidson analysts recently increased their price target on Amazon’s stock to $280, maintaining a Buy rating. This decision followed Amazon’s recent earnings report, which showed improved profitability in Retail and consistent growth in Amazon Web Services (AWS). Similarly, Piper Sandler adjusted its financial outlook for Amazon, raising the price target to $265 and maintaining an Overweight rating. This was in response to Amazon’s fourth-quarter results, which exceeded expectations.
In addition to financial updates, Amazon announced plans to launch a significant update to its Alexa AI voice service later this month. This update could potentially transform Alexa into a more active agent for users. Amazon also announced a strategic partnership with Bouygues (EPA:BOUY), a diversified services group, to accelerate digital transformation across Bouygues’ operations.
However, Amazon also faces challenges. The company recently decided to shut down all of its warehouses in Quebec, Canada, leading to the termination of over 1,900 workers. This move has prompted the Federation of National Trade Unions to initiate legal action. These recent developments underscore Amazon’s ongoing efforts to expand and innovate, even as it navigates various challenges.
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