Amazon.com Inc (NASDAQ:AMZN)’s big third quarter beat on its bottom line had many Wall Street analysts singing the company’s praises on Friday, with commentary focused largely on the e-commerce giant’s margins.
BofA Securities analysts, for example, noted that the company's holiday outlook suggests some deceleration in growth, but margins are well above estimates and management was constructive on its AWS cloud division's outlook.
They reiterated their ‘Buy’ rating on the stock, while lowering their price objective slightly to $168 per share from $174 on lower revenue estimates and a lower advertising segment multiple.
Meanwhile, analysts at Wedbush channeled their inner Journey, telling clients: "Don't Stop Believin' When Margins Are Rising."
"We believe the company is early in the current margin cycle and now expect 2024 operating income of $44.75 billion, implying a 7.0% margin and year over year growth of 29%," the analysts wrote.
They also viewed management’s commentary regarding AWS as "upbeat” and suggested a strong customer pipeline ahead in addition to $10 billion plus of potential AWS revenue stemming from AI over the next several years.
Wedbush analysts reiterated their ‘Outperform’ rating and $180 target price on the stock and continue to view Amazon as their best idea across their coverage group.
And, Jeffries analysts appeared to be the most bullish, bumping their target price on Amazon stock up by 46% to $175 per share.
"While year over year AWS backlog growth was the slowest ever, we don't believe the Q3 backlog number fully reflects new deals signed in September that have an effective date in October, suggesting backlog growth would have been stronger," they wrote.
Shares of Amazon climbed 7% to $127.43 in late-afternoon trading on Friday and have gained 49% year to date.
Contact Sean at sean@proactiveinvestors.com