On Monday, TD Cowen upheld its Buy rating on Amazon.com (NASDAQ:AMZN) shares with a steady price target of $230.00. The firm anticipates an acceleration in the e-commerce giant's revenue growth for the third quarter, projecting a 10.7% year-over-year increase, which is slightly higher by 0.8% compared to the consensus. The growth is expected to be fueled by Amazon Web Services (AWS) and advertising revenues, which are predicted to rise by 19.8% and 20.0% year-over-year, respectively.
The analyst from TD Cowen forecasts that Amazon's operating income for the third quarter will reach $16.0 billion, standing 9% above the consensus. This optimistic projection is attributed to the strong performance anticipated from AWS and the advertising segments, along with a reduction in the cost to serve customers.
Despite this positive outlook for the third quarter, the firm has marginally reduced its operating income estimates for the fourth quarter and the long term, while simultaneously increasing its estimates for AWS.
TD Cowen also revealed quarterly estimates for the year 2025, although the firm has decided to maintain the price target for Amazon at $230.00. The unchanged price target reflects a balance between the slight adjustments made to the operating income expectations and the firm's confidence in Amazon's growth trajectory, particularly in its AWS and advertising businesses.
Amazon's stock continues to be viewed favorably by TD Cowen, with the firm's analysis suggesting an upcoming period of revenue expansion and profitability driven by key segments of the company's diverse business model. The detailed financial forecasts demonstrate the firm's in-depth analysis of Amazon's potential performance in the near future.
In other recent news, Amazon.com Inc (NASDAQ:AMZN) has been the subject of several noteworthy developments. Mizuho Securities has maintained its Outperform rating for Amazon with a price target of $240. The firm's confidence is bolstered by increasing investments in Amazon Web Services (AWS) and a revised upward spending forecast, predicting a 25% year-over-year growth for AWS in fiscal year 2024.
Simultaneously, Truist Securities has raised its price target for Amazon to $265, citing robust advertising revenue and AWS's accelerated expansion.
In addition to these analyst updates, Amazon has secured a partial dismissal in an antitrust lawsuit filed by the U.S. Federal Trade Commission, although the specifics of this dismissal remain undisclosed. The National Labor Relations Board has also filed a complaint against Amazon, alleging the company illegally refused to negotiate with a union representing drivers employed by an Amazon contractor.
Amazon, a major stakeholder in Rivian (NASDAQ:RIVN) Automotive Inc, has seen the electric vehicle manufacturer adjust its full-year production forecast due to a parts shortage. Rivian now expects to produce between 47,000 and 49,000 vehicles, a decrease from the initially projected 57,000 units.
Finally, the Philippines has introduced a 12% value-added tax on digital services provided by international tech firms, including Amazon, aiming to generate additional revenue from the digital economy and ensure fair competition. These are the recent developments concerning Amazon.
InvestingPro Insights
To complement TD Cowen's bullish outlook on Amazon, InvestingPro data reveals some intriguing metrics that align with the analyst's projections. Amazon's revenue for the last twelve months as of Q2 2024 stands at an impressive $604.33 billion, with a robust revenue growth of 12.32% over the same period. This growth trajectory supports TD Cowen's expectation of accelerated revenue in the upcoming quarter.
InvestingPro Tips highlight that Amazon is a "Prominent player in the Broadline Retail industry" and has been "Profitable over the last twelve months." These insights reinforce the company's strong market position and financial health, which are crucial factors in TD Cowen's positive rating.
Moreover, Amazon's operating income margin for the last twelve months as of Q2 2024 is reported at 9.0%, which could potentially surpass expectations if TD Cowen's forecast of $16.0 billion in operating income for Q3 materializes. This aligns with the InvestingPro Tip suggesting that Amazon is "Trading at a low P/E ratio relative to near-term earnings growth," indicating potential upside for investors.
For readers interested in a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into Amazon's financial outlook and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.