BofA Securities analyst Justin Post has maintained his Buy rating for Amazon.Com Inc (AMZN) and raised his price target to $204, indicating his optimism about the company’s future performance.
Post anticipates Amazon’s first-quarter earnings to reflect positive trends, with revenue projections of $143 billion, aligning with market expectations. He expects strong growth from Amazon’s cloud computing division, AWS, and its advertising business. The analyst also suggests the possibility of outperformance in Amazon’s retail segment.
Looking ahead to the second quarter, Post has adjusted his revenue expectations to $149.9 billion, considering factors such as the recent U.S. dollar depreciation and potential demand shifts due to seasonal sales events. He remains optimistic about Amazon’s continued growth in eCommerce, supported by data indicating a slight acceleration in U.S. online spending.
Post highlights Amazon’s strategic initiatives, such as the upcoming Worldwide Developer Conference (WWDC) and new AI software features, as potential catalysts for growth. He believes these initiatives could boost the company’s stock performance and contribute to multiple expansions in 2024.
The analyst also notes that despite a forward P/S multiple increase year-to-date, Amazon’s valuation remains below its ten-year average, suggesting room for multiple expansion. This suggests that the stock may still have upside potential.
Post’s positive outlook on Amazon is supported by data indicating a slight acceleration in U.S. eCommerce spending, which is expected to drive strong results in Amazon’s retail business. He also points to Amazon’s Big Spring Sale and the introduction of Prime Video ads as factors contributing to revenue growth.
Overall, BofA Securities’ Justin Post remains bullish on Amazon, expecting a strong first quarter and continued growth in the future. He believes the company’s strategic shifts and operational efficiencies will support margin expansion and drive stock performance.
