Oppenheimer & Co has upped its price target for Amazon.com Inc (NASDAQ:AMZN) after the e-commerce giant’s 2Q results posted after the bell on Thursday “exceeded expectations.”
Amazon’s revenue growth of 7% topped analyst estimates with the company forecasting 3Q revenue between $125 billion and $130 billion, compared to the consensus analyst expectation of $126.4 billion.
Post-results, Oppenheimer analysts raised their 12-to-18-month price target for the online retailer to $165 from $160, maintaining their ‘Outperform’ rating. Amazon shares were trading up about 12% mid-morning on Friday at about $137 per share.
READ: Amazon soars more than 10% on sunny 3Q revenue forecast despite 2Q earnings miss
The Oppenheimer analysts noted that consumer spending had been stronger than expected with Amazon's “more affluent customer base less affected by inflationary pressures, benefitting top-line and margins, with macro headwinds only affecting wage/commodity cost pressures.”
They also highlighted the strength of the company’s advertising and Amazon Prime membership.
Noting Amazon’s “excess costs” of $4 billion were in line with guidance, the analysts said they were expecting $1.5 billion in sequential fulfilment cost improvements.
They added that this would be offset by increased costs in Amazon Web Services infrastructure and Prime content, specifically Thursday Night Football and the highly anticipated upcoming series ‘The Lord of the Rings: The Rings of Power.’
Contact the author Emily Jarvie at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie