Amazon.com Inc (NASDAQ:AMZN)’s current valuation represents an attractive entry point for long-term investors, according to analysts at Canaccord Genuity (TSX:CF, LSE:CF).
Following the release of the eCommerce giant’s 4Q 2022 results after the bell on Thursday, the analysts reiterated their ‘Buy’ rating for the stock with a price target of US$135.
Amazon’s shares have fallen 6.1% in pre-market trading at about US$106.05.
READ: Amazon stock falls after worst annual loss on record; manages 9% sales growth in 4Q
In a note to clients, Canaccord’s analysts wrote that in 4Q Amazon’s total revenue grew 9% year-over-year and its operating margin of 1.8% was largely in line with expectations, with its discretionary categories challenged as consumer spending was once again impacted by the uncertain macro backdrop and inflation.
"1Q revenue and operating income guidance both came in below consensus, with macro uncertainty and inflation continuing to impact both consumer and enterprise spending, partly offset by easing FX headwinds and ongoing efforts to streamline costs in non-critical areas,” they wrote.
The analysts concluded: “Shares of Amazon are likely to remain volatile until economic visibility improves, although our long-term confidence is bolstered by Amazon's leadership position, new investment areas, and a sharpened focus on efficiency.”
Analysts at Oppenheimer also remain confident in the stock, raising their price target for the stock to US$135 with an ‘Outperform’ rating based on “roll-forward, partially offset by lower Amazon Web Services (AWS) outlook.”
Oppenheimer’s analysts noted that Amazon’s eCommerce margins improved quarter-over-quarter and should benefit from 1Q headcount reductions.
Contact the author at emily.jarvie@proactiveinvestors.com
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