Amazon Shares Hit Record High After A Blowout Quarter; Analysts Lift Price Targets

Amazon.com, the world’s largest online retailer, reported better-than-expected earnings and revenue in the first quarter of 2021 as online sales surged due to the COVID-19 pandemic, sending shares to a record high on Friday.

The multinational technology company based in Seattle said its net income increased to $8.1 billion in the first quarter, or $15.79 per diluted share, compared with net income of $2.5 billion, or $5.01 per diluted share, in first-quarter 2020. That was higher than the Wall Street consensus estimates of $9.49 per share.

The Seattle, Washington-based company said its net sales increased 44% to $108.5 billion in the first quarter, compared with $75.5 billion in first-quarter 2020. Operating income increased to $8.9 billion.

On the second quarter 2021 guidance, Amazon.com forecast net sales between $110.0 billion and $116.0 billion, or to grow between 24% and 30% compared with second-quarter 2020. Operating income is expected to be between $4.5 billion and $8.0 billion, compared with $5.8 billion in second-quarter 2020.

Following the upbeat results, Amazon shares rose about 2% to hit an all-time high of $3554.00 on Friday.

Analyst Comments

“Amazon’s (AMZN) 1Q21 result reflected a broad beat, with rev 4% above cons, Op Inc +43% vs. cons, and strength across all segments, including International growth of +50% y/y, which paced above NA (+39% y/y) for the 2nd quarter in a row; while AWS & adv. accelerated. 2Q21 rev. and Op Inc. guide (high end) were well above consensus. We raised estimates, price target to $4,600 from $4,400, reiterate Outperform,” noted John Blackledge, equity analyst at Cowen.

Amazon Stock Price Forecast

Thirty-four analysts who offered stock ratings for Amazon in the last three months forecast the average price in 12 months of $4,300.00 with a high forecast of $5,500.00 and a low forecast of $3,750.00.

The average price target represents a 21.85% increase from the last price of $3,529.04. All of those 34 analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of $4,500 with a high of $5,300 under a bull scenario and $2,700 under the worst-case scenario. The firm gave an “Overweight” rating on the e-commerce giant’s stock.

“Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last-mile delivery, fulfillment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc),” noted Brian Nowak, equity analyst at Morgan Stanley.

“Amazon Prime membership growth drives recurring revenue and positive mix shift. Cloud adoption hitting an inflection point. Advertising serves as a key area for both further growth potential and profitability flow-through.”

Several other analysts have also updated their stock outlook. BofA raised the stock price forecast to $4360 from $4150. Canaccord Genuity raised the target price to $4400 from $4100. UBS lifted the price objective to $4350 from $4150. Oppenheimer upped the target price to $4400 from $4200. Raymond James increased the target price to $4125 from $4000. JP Morgan raised the target price to $4,600 from $4,400.

Moreover, Stifel lifted the target price to $4400 from $4000. Deutsche Bank raised the target price to $4500 from $4250. Truist Securities lifted the target price to $4000 from $3750. BMO increased the target price to $4300 from $4200. Mizuho upped the target price to $4400 from $4000. Guggenheim lifted the target price to $4,200 from $4,000. Wedbush lifted the target price to $4,300 from $4,000.

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