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During or Post-Covid, Amazon Stock Benefits Whichever Way the Wind Blows

On Thursday, a tech heavy line up will report quarterly results in what should amount to a crescendo – a techscendo? – to this most unique earnings season. Among these tech giants, it is Amazon (AMZN) that has shone the brightest in 2020. Covid-19’s impact has inadvertently been a boon for the e-commerce giant, but the question among investors is, at what cost?

The surge in demand for Amazon’s products has led to outsized sales during the pandemic but has also led to additional outlays putting a squeeze on profit margins.

As a result, Monness analyst Brian White expects Amazon to report “strong revenue growth but COVID-19 costs to curtail profits.”

White anticipates Amazon will beat Monness’ estimate for revenue of $79.85 billion (Street is calling for $81.31 billion). The analyst also predicts the e-commerce king will “at least meet” the firm’s EPS projection of $1.19 (Street says $1.37).

Looking beyond Thursday’s print, White is excited by the possibilities the future holds for the all-encompassing Amazon. COVID-19 has accelerated a trend that was already at play – society’s further advance into the digital realm. White puts it nicely when he says the “floodgates of digital transformation are opening wide.”

Warming to the theme, the 5-star analyst further said, “In this new reality, we believe Amazon holds the key capabilities, vast global infrastructure and financial strength necessary to support the needs of people and organizations around the world, while also positioning Amazon as a major beneficiary of accelerated digital transformation in the aftermath of this pandemic.. This crisis will accelerate digital transformation, a positive for Amazon’s ecommerce, AWS, digital ads, Alexa, Twitch, Scout delivery robots, Go stores, Dash Carts, digital entertainment, devices and more.”

Unsurprisingly, White has a Buy on Amazon alongside a $3,500 price target. What’s in it for investors? Upside in the shape of 15%. (To watch White’s track record, click here)

There is little argument with White’s thesis on Wall Street. Sans 2 Hold ratings, the rest of the 37 analysts to have posted an Amazon review over the last 3 months, implore investors to Buy. However, the average price target stands at $3,206.52, which implies a modest upside of nearly 6%. (See Amazon stock analysis on TipRanks)

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Marty Shtrubel
Marty Shtrubel was born in the UK, raised in Israel, and then headed back to London, where he made music and pursued a career in sound recording. After a move back to Tel Aviv, he set off on a new path and now works as a financial blogger at TipRanks.

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