TSX drops after Canadian index edges higher in prior session
Investing.com - Goldman Sachs has reiterated its Buy rating on Amazon.com (NASDAQ:AMZN) while raising its price target from $275 to $290, representing about 30% upside from the current price of $222.86. According to InvestingPro data, Amazon is trading near its Fair Value, with analysts setting targets ranging from $230 to $306.
The investment bank cited Amazon’s potential for strong compounded revenue growth and operating margin expansion over multiple years, even as the company continues investing in long-term growth initiatives. This aligns with Amazon’s impressive 18% revenue CAGR over the past five years and its healthy gross profit margin of 49.6%.
Goldman Sachs analyst Eric Sheridan identified three key factors positioning Amazon for future outperformance: improving eCommerce margins from higher volumes across a more efficient logistics network, scaling of the high-margin advertising business, and AWS benefiting from enterprise customer needs with tailwinds from generative AI workloads. InvestingPro data shows Amazon maintains a "GREAT" financial health score of 3.2, with a PEG ratio of 0.58, suggesting it’s trading at a low P/E relative to its growth potential.
The firm noted that investor focus might shift from AWS’s AI positioning toward increased scrutiny of the consumer environment and potential behavior changes in coming quarters.
Goldman Sachs adjusted its forward operating estimates following Amazon’s earnings report, with the new price target representing approximately 29 times the bank’s 2027 GAAP EPS estimate, against projected 27% year-over-year EPS growth for 2027.
In other recent news, Amazon reported its third-quarter 2025 earnings, exceeding analysts’ expectations. The company achieved an earnings per share (EPS) of $1.95, surpassing the projected $1.56. Additionally, Amazon’s revenue reached $180.2 billion, slightly above the anticipated $177.75 billion. Despite this strong financial performance, the stock experienced a decline in after-hours trading. These developments highlight Amazon’s ongoing financial activities and outcomes.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.