Amazon Q2 Earnings Preview: What To Expect

Amazon, Inc. AMZN is set to report second-quarter earnings Thursday, July 26 after the close, and two sell-side analysts held the line on their ratings ahead of the print this week. 

The Analysts

Wedbush analyst Michael Pachter maintained an Outperform rating on Amazon with an $1,800 price target. 

KeyBanc Capital Markets analyst Edward Yruma maintained a Sector Weight rating on Amazon. 

The Thesis

Amazon has started to diversify into in-store marketing, specifically with their integration of Whole Foods, KeyBanc's Yruma said in a note. (See the analyst's track record here.) 

The initiative, along with incremental discounts for Amazon Prime customers, have been successful in driving sales growth, the analyst said. 

"Amazon is one of the most disruptive forces in retail and technology today. We think it will continue to take market share and also benefit as total share accorded to e-commerce continues to grow." 

Wedbush's Q2 estimates are based on revenue of $59.44 billion. This estimate may be too conservative given strong economic trends and ongoing growth in Amazon Prime, Pachter said in a note. (See the analyst's track record here.) 

As for Prime Day, Pachter said this year’s record-breaking results should position Amazon at a Q3 level that exceeds expectations.

Wedbush's $1,800 price target is under review pending the quarterly print, the analyst said. 

“The company has demonstrated that it can deliver significant profits when it chooses to, and we expect management to temper its investment over the next few years, enabling substantial revenue and operating income growth to translate to higher levels of profitability." 

Price Action

Amazon shares were up 1.88 percent at $1,863.61 at the close Wednesday. 

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Photo courtesy of Amazon.