Goldman Sachs Lifts Amazon Price Target Ahead Of Q1 Report

Amazon.com, Inc. AMZN is likely to report first-quarter results April 30 that are significantly ahead of the consensus estimates for both revenue and profitability and guide to a better-than-expected second quarter, according to Goldman Sachs.

The Amazon Analyst

Heath P. Terry maintained a Buy rating on Amazon and raised the price target from $2,600 to $2,900.

The Amazon Thesis

Amazon’s retail, cloud and ads businesses are all witnessing an increase in demand, Terry said in the Thursday note. (See his track record here.)

The company’s ability to meet this higher demand will “steepen the curve of its long term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its businesses,” the analyst said. 

Goldman expects Amazon to report total revenue of $74.1 billion, representing 24% year-on-year growth and beating the consensus estimate of $72.9 billion.

Excluding the impact of physical stores, the company’s revenue growth is likely to accelerate to 25%, he said. 

Terry said he expects Amazon to report operating income of $4.3 billion, with Amazon fulfillment and AWS headcount and logistics disruption weighing on near-term efficiency.

Although the stock has outperformed, it still does not fully represent the long-term value of Amazon’s e-commerce platform and AWS, which has been highlighted by consumer and enterprise adoption in the current crisis, the analyst said.

AMZN Price Action

Shares of Amazon were up 1.93% to $2,409 at the time of publication Thursday.

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Photo courtesy of Amazon.