Benchmark analyst Daniel L. Kurnos reiterated a Buy rating on Amazon.Com Inc (NASDAQ: AMZN) and raised the price target from $170 to $175.
The company will likely report its fourth quarter of fiscal 2023 results a week from this Thursday.
While Wall Street is no longer interested in Amazon the retailer, with all the commentary centering on the upcoming launch of Prime Video Ads, the analyst expects another solid e-commerce quarter (+7% e-commerce, +15% services ex-AWS and advertising), marked by further share gains and healthy margin expansion (+5.5% operating income).
Kurnos has a different view than many about the size and impact of the Prime Video Ads launch, particularly as it relates to the industry as a whole and the potential winners and losers.
On the plus side, consensus does not seem to have incorporated Prime Video into numbers.
AWS expectations seem reasonable heading into a year where generative AI cloud costs could help drive an early reacceleration.
Kurnos, therefore, maintained his favorable view of Amazon despite the rapid share recovery.
For the quarter, Kurnos is in line with the street and modestly ahead of the mid-point of guidance.
Given commentary around the consumer and expected further share gains, he suspects Amazon will post another upside revenue quarter across the retail board despite ongoing discounting.
The timing of the AWS reaccel could be a modest concern. Still, the analyst noted that the consensus looks reasonable enough from the fourth quarter of fiscal 2023 to the fourth quarter of fiscal 2024 to prevent significant hurdles, barring a surprise negative sea change.
Kurnos projects fourth quarter fiscal 2023 revenue and EPS of $165.49 billion (vs. consensus of $165.90 billion) and $1.27 (vs. consensus of $1.30).
Price Action: AMZN shares are down 0.32% at $152.84 on the last check Monday.