Amazon Is A Buy: Analyst Highlights E-Commerce Leadership, Retail Profitability, AWS Growth As Catalysts

Seaport analyst Aaron Kessler initiated coverage of ten companies within the Internet Sector.

Concerning eCommerce and Transaction Models, the analyst had a Buy rating on Amazon.Com Inc AMZN with a price target of $145, a Neutral rating on Airbnb, Inc ABNB and DoorDash, Inc (Neutral rating) DASH, and a Buy rating on  Uber Technologies, Inc UBER with a price target of $51.

For Amazon, Kessler expects steady Retail growth, continued Retail margin improvement from fulfillment and shipping optimization, continued ad momentum, and expects accelerating AWS growth in 4Q of 2024 as comps ease and the pipeline remains strong. 

The analyst is positive on Amazon shares given continued e-commerce leadership, improving profitability in retail, and expectation for acceleration in AWS growth in 4Q and into 2024.

He projects Q3 revenue and EPS of $140.39 billion vs. consensus $133.39 billion and $0.63 vs. consensus $0.55.

For Airbnb, the analyst is optimistic about clear leadership in alternative accommodations. He expects mixed bookings trend with softer U.S. though more robust International trends. He expects 15% and 12% bookings growth in 2023 and 2024. 

The analyst projects Q3 revenue and EPS of $3.33 billion vs. consensus $3.18 billion and $2.30 vs. consensus $1.96.

In the case of Uber, Kessler will look for continued Mobility strength in developed markets and emerging markets and newer products. Delivery trends remain solid, particularly for International. 

As per the analyst, top-line momentum, advertising growth, and expense discipline are driving strong bottom-line results.

The analyst projects Q3 revenue and EPS of $9.39 billion vs. consensus $8.99 billion and $0.06 vs. consensus $0.11.

The analyst is optimistic about DoorDash's U.S. leadership position (~65% market share). Kessler is happy with new categories and international, though early.

The analyst projects Q3 revenue and EPS loss of $2.10 billion vs. consensus $2.09 billion and $(0.42) vs. consensus loss of $(0.40).

Price Action: AMZN shares traded higher by 0.96% at $127.78 on the last check Tuesday.