Amazon.com (NASDAQ:AMZN) Shares Up 2.1% on Analyst Upgrade

Key Points

• Amazon shares rose 2.1% after Freedom Broker raised its price target from $255 to $330 and reiterated a Buy rating. Analysts’ consensus rating is Moderate Buy, with an average target of $321.02.
• Amazon’s latest quarter fell slightly short of expectations: EPS was $1.89 versus a $1.97 consensus, and revenue was $201.94 billion versus $202.22 billion expected, although revenue grew 12.1% year over year.
• Investors are weighing cloud growth against spending concerns: AWS revenue grew 39%, while heavy AI and data-center investment is pressuring free cash flow and raising questions about future returns.

Shares of Amazon.com, Inc. (NASDAQ:AMZN - Get Free Report) were up 2.1% during mid-day trading on Tuesday after Freedom Broker raised their price target on the stock from $255.00 to $330.00. Freedom Broker currently has a buy rating on the stock. Amazon.com traded as high as $252.45 and last traded at $250.69. Approximately 37,370,486 shares were traded during trading, a decline of 19% from the average session volume of 46,345,898 shares. The stock had previously closed at $245.63.

A number of other equities research analysts also recently issued reports on the stock. TD Cowen reiterated a "buy" rating and issued a $340.00 target price (down from $350.00) on shares of Amazon.com in a research report on Friday. Wells Fargo & Company lowered their price target on shares of Amazon.com from $329.00 to $326.00 and set an "overweight" rating on the stock in a report on Friday. Pivotal Research reaffirmed a "buy" rating and issued a $333.00 price target (up from $320.00) on shares of Amazon.com in a research note on Friday, July 31st. Truist Financial set a $390.00 price objective on Amazon.com in a report on Friday. Finally, Tigress Financial reissued a "buy" rating and set a $385.00 price objective (up from $315.00) on shares of Amazon.com in a research report on Tuesday, October 6th. Two analysts have rated the stock with a Strong Buy rating, fifty-six have assigned a Buy rating and three have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $321.02.

Insider Activity at Amazon.com

In related news, CEO Douglas J. Herrington sold 6,362 shares of the company's stock in a transaction on Friday, August 21st. The shares were sold at an average price of $259.01, for a total value of $1,647,821.62. Following the completion of the sale, the chief executive officer directly owned 476,681 shares in the company, valued at approximately $123,465,145.81. This represents a 1.32% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP David Zapolsky sold 9,258 shares of the stock in a transaction on Monday, August 24th. The stock was sold at an average price of $259.77, for a total transaction of $2,404,950.66. Following the transaction, the senior vice president directly owned 41,190 shares in the company, valued at $10,699,926.30. The trade was a 18.35% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 70,589 shares of company stock worth $18,302,125 over the last quarter. 8.90% of the stock is currently owned by corporate insiders.

Key Stories Impacting Amazon.com

Here are the key news stories impacting Amazon.com this week:

• Positive Sentiment: Freedom Broker raised its price target to $330 from $255 and assigned a Buy rating. Phillip Securities also upgraded Amazon to Strong Buy, adding to positive analyst sentiment. Freedom Broker recommendations
• Positive Sentiment: AWS revenue grew 39% in the latest quarter, its fastest growth in nearly five years and a key reason investors see continued potential in Amazon’s cloud and AI businesses. Coverage also points to improving retail margins as a longer-term opportunity. Amazon earnings and AWS growth
• Positive Sentiment: Amazon has begun offering Black Friday deals early, potentially helping attract shoppers during the holiday season. Early Black Friday deals
• Negative Sentiment: Heavy spending on AI and data centers is weighing on free cash flow. Reports cite a substantial cash outflow and plans for as much as $80 billion in supplier financing, prompting questions about whether future returns will justify the investment. Supplier financing and AI spending
• Negative Sentiment: Investors are also watching e-commerce growth, which has appeared slower, and Amazon’s recent earnings miss. A Prime Day calendar shift partly affected the retail comparison, but concerns about cash flow and spending persist. Amazon earnings, cash flow and growth concerns

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the stock. Bank of America Corp DE acquired a new stake in shares of Amazon.com during the second quarter worth approximately $22,218,775,000. Bank of New York Mellon Corp acquired a new stake in shares of Amazon.com during the 2nd quarter valued at $16,341,405,000. Legal & General Group Plc purchased a new position in shares of Amazon.com during the 2nd quarter valued at $12,831,376,000. Mitsubishi UFJ Asset Management Co. Ltd. acquired a new position in shares of Amazon.com in the second quarter worth $6,631,466,000. Finally, Jupiter Topco LLC acquired a new position in shares of Amazon.com in the second quarter worth $5,910,083,000. Institutional investors and hedge funds own 72.20% of the company's stock.

Amazon.com Trading Up 2.1%

The company has a debt-to-equity ratio of 0.23, a current ratio of 1.03 and a quick ratio of 0.87. The company has a fifty day moving average of $254.02 and a 200-day moving average of $243.11. The firm has a market capitalization of $2.70 trillion, a PE ratio of 20.27, a price-to-earnings-growth ratio of 1.98 and a beta of 1.45.

Amazon.com (NASDAQ:AMZN - Get Free Report) last issued its earnings results on Thursday, October 29th. The e-commerce giant reported $1.89 EPS for the quarter, missing analysts' consensus estimates of $1.97 by ($0.08). Amazon.com had a net margin of 17.44% and a return on equity of 18.00%. The firm had revenue of $201.94 billion during the quarter, compared to analysts' expectations of $202.22 billion. During the same quarter last year, the firm earned $1.95 EPS. The business's revenue for the quarter was up 12.1% compared to the same quarter last year. On average, sell-side analysts anticipate that Amazon.com, Inc. will post 8.00 earnings per share for the current fiscal year.

Amazon.com Company Profile

Amazon.com, Inc is a global technology and e-commerce company founded by Jeff Bezos in 1994. Originally launched as an online bookstore, the company has expanded into a broad digital marketplace offering consumer products across numerous categories, including electronics, household goods, apparel, groceries and other merchandise. Amazon also sells products under its own brands and provides logistics, fulfillment and delivery services that support its retail operations and third-party sellers.

The company's principal businesses include online and physical retail, Amazon Web Services (AWS), digital advertising, subscription services and consumer technology.

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