E-commerce giant Amazon.com, Inc AMZN is set to report third-quarter financial results after market close on Thursday, Oct. 26, 2023.
Here’s a look at the earnings estimates from analysts, what analysts are saying and key items for investors to watch.
Earnings Estimates: Analysts expect Amazon to report third-quarter revenue of $141.44 billion, according to data from Benzinga Pro.
The company reported $127.10 billion in revenue in the third quarter last fiscal year. The company has beaten estimates from analysts for revenue in four of the last five quarters.
Previous guidance from the company calls for third-quarter revenue to be in the range of $138 billion to $143 billion.
Analysts expect Amazon to report earnings per share of 58 cents in the third quarter, compared to 17 cents reported in the third quarter of last year. The company has beaten earnings per share estimates in four of the last five quarters.
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What Analysts Are Saying: Analysts have been mostly bullish on Amazon ahead of the third quarter financial results.
Seaport analyst Aaron Kessler recently initiated coverage of Amazon with a Buy rating and price target of $145.
The analyst expects Amazon to show retail growth and margin improvement in the third quarter. The momentum of the company’s advertising business and AWS growth are other key highlights for the analyst ahead of the earnings report.
Revenue and profit for Amazon should come in ahead of Street estimates in the third quarter, Bank of America analyst Justin Post said recently.
The analyst, who had a Buy rating and price target of $174, said AWS revenue growth is a key metric and should perform strongly in the third quarter.
Post said holiday hiring indicates strong demand for Amazon in the fourth quarter.
The advertising growth for Amazon is key to the bullish take on the company by Mizuho analyst James Lee.
Lee, who had a Buy rating and price target of $180, said Amazon’s advertising business is tracking ahead of estimates from analysts.
A strong October Prime Day is also a key point from Lee ahead of the third quarter financial results, leading into a strong fourth quarter.
While most investors and analysts are mixed heading into the third quarter results, Wedbush analyst Scott Devitt thinks a strong report will come from Amazon.
The analyst, who had an Outperform rating and a price target of $180, said retail margins should increase and AWS should continue to grow against easier comps going forward. Devitt said Amazon could be early in the current margin cycle and see shares increase to catch up with the outperformance.
Here’s a look at other analyst ratings notes in the month of October:
Oppenheimer: Outperform rating, $170 price target
UBS: Buy rating, lowered price target from $180 to $178
Truist Securities: Buy rating, lowered price target from $176 to $174
Deutsche Bank: Buy rating, $175 price target
JMP Securities: Market Outperform rating, $175 price target
Telsey: Outperform rating, $160 price target
Wells Fargo: Overweight rating, $165 price target
Morgan Stanley: Overweight rating, $175 price target
Key Items to Watch: There will be many items analysts and investors will be watching for in the third-quarter results and conference call.
Among the biggest items will be the company’s AWS platform to see if it is growing and gaining more customers going forward.
Investors will also look for clues on how the 2023 holiday season is shaping up for the e-commerce leader with commentary from the company on early spending and expectations.
An added bonus in recent years for Amazon has been the growth of its Prime Video subscription, helped by new content and sports rights. The company’s “Thursday Night Football” broadcasts are setting records.
Through the first six weeks of the 2023 NFL season, viewership is averaging 12.91 million for “Thursday Night Football,” up 25% year-over-year.
Amazon is also said to be looking to bid on more sports rights, including the highly anticipated NBA rights soon coming up for bid. Comments or questions on Amazon’s content strategy could show where the company is headed for Prime Video.
Another big topic for many technology companies reporting financial results is the growth of artificial intelligence and spending on the fast-growing technology.
Investors and analysts will be looking for an update from the company on its future AI plans.
“Our AWS growth stabilized as customers started shifting from cost optimization to new workload deployment, and AWS has continued to add to its meaningful leadership position in the cloud with a slew of generative AI releases,” Amazon CEO Andy Jassy said in the company’s second-quarter results.
AMZN Price Action: Amazon shares trade at $122.46 versus a 52-week trading range of $81.43 to $145.86. Shares of Amazon are up 45% year-to-date in 2023 but are trading up only 4% in the last year.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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