Cantor Fitzgerald has adjusted its price target for Amazon.com (NASDAQ: NASDAQ:AMZN), decreasing it to $210 from the previous $230 while retaining an Overweight rating on the stock.
The firm anticipates Amazon's third-quarter 2024 earnings to report revenue figures that align largely with expectations, and earnings before interest and taxes (EBIT) that are slightly higher than the consensus from Visible Alpha.
This pattern has been consistent over the last two quarters.
The firm also provided insight into Amazon's fourth-quarter 2024 guidance, suggesting it might fall short of market expectations in terms of both revenue and EBIT, citing seasonal slowdown and margin pressures. Additionally, the upcoming Kuiper rocket launch in December is expected to present an incremental margin challenge.
Cantor Fitzgerald has projected Amazon's fourth-quarter revenue and EBIT to range between $180 billion to $185 billion and $12 billion to $16.5 billion, respectively. Despite these projections, the firm noted that the investment community seems to be acclimating to the potential fourth-quarter risks.
However, the third-quarter earnings report is not expected to significantly boost Amazon's stock in the near term due to uncertainties surrounding the margin trajectory for the fiscal year 2025.
In light of these assessments, Cantor Fitzgerald has revised its EBIT estimates for the fourth quarter of 2024 and the full fiscal year 2025 downwards by 8% and 6%, respectively. The revised price target of $210 reflects these updated expectations and the potential headwinds facing Amazon.
InvestingPro Insights
To complement Cantor Fitzgerald's analysis of Amazon, InvestingPro data offers additional context for investors. Amazon's market capitalization stands at an impressive 1.5 trillion USD, underscoring its position as a tech giant. The company's P/E ratio of 29.36 suggests that investors are willing to pay a premium for Amazon's future earnings potential, despite the anticipated challenges in Q4 2024.
InvestingPro Tips highlight Amazon's financial strength, noting that the company "Holds more cash than debt on its balance sheet." This robust cash position could provide Amazon with the flexibility to navigate potential margin pressures and invest in initiatives like the Kuiper rocket launch.
Another relevant InvestingPro Tip indicates that Amazon has "Impressive gross profit margins." This aligns with Cantor Fitzgerald's expectation of EBIT slightly exceeding consensus for Q3 2024, suggesting that Amazon maintains strong profitability despite market challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Amazon, providing a deeper understanding of the company's financial health and market position.
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