Amazon Prime Members Save Big, BofA Holds Bullish Stance Amid Stock Fluctuations

BofA analyst Justin Post maintained a Buy rating on Amazon.Com Inc AMZN stock with a price target of $174.

Amazon held Big Deal Days on October 10-11. In the usual, limited press announcement, Amazon indicated Prime members saved over $1 billion on "hundreds of millions" of items, of which "millions" have already been delivered to U.S. customers. 

2023 was the first October sales event that customers could order off-site through Buy with Prime, which helped drive more than 150 million total items from 3P sellers for purchase. The release emphasized delivery speed. 

Post's 43% Y/Y Big Deal Days unit growth estimate translates to $9.1 billion in total GMV vs. last October's estimate of $6.6 billion (and about $3 billion in GMV lower than Prime Day in July). 

For revenues, assuming a 35% take rate for 3P, he estimated $6.0 billion in revenue vs. $4.5 billion last year (+33% Y/Y).

The Big Deal 3P unit growth metric appears positive and suggests a solid start to 4Q. Also, Post views Amazon's announcement to hire up to 250k employees this season (up 67% Y/Y) as a sign of management's anticipation of strong Holiday demand. 

While consumer demand has added macro uncertainty, his card data suggests some acceleration in eCommerce spend in 3Q, and, given easy comps, he continues to anticipate eCommerce acceleration in 4Q followed by AWS acceleration in 1Q, a favorable setup for the stock.

Price Action: AMZN shares traded lower by 2.04% at $129.63 on the last check Friday.