Amazon (NASDAQ:AMZN) will take its turn to dial in its latest quarterly report on Thursday (Feb 6), with most of its tech giant peers having already reported their Q4 results.
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According to Telsey Advisory analyst Joseph Feldman, the e-commerce giant is about to deliver a solid readout. Driven by robust holiday season trends, continued strength in online spending, an expanded product selection, improved fulfillment speeds, and strong demand for AWS cloud and AI-related services, Feldman anticipates “continued double-digit sales” in 4Q24.
Moreover, driven by the expansion of higher-margin categories and services like advertising, media, and AWS (partially boosted by AI-related enhancements), profit growth should be on the menu. Feldman also thinks additional support will come from the redesigned distribution network – shifting from a centralized model to smaller, regionally focused hubs – along with ongoing cost savings. “In our view,” the analyst added, “these factors should continue to fuel growth and profits in 2025.”
As for the raw numbers, the analyst anticipates solid Q4 growth of 10.5%, with revenues reaching $187.8 billion, vs. FactSet consensus at $187.3 billion and the guided range of $181.5 billion to $188.5 billion. Feldman expects North American sales will grow by 8.5% to $114.5 billion, International sales by 10.5% to $44.5 billion, and AWS sales to show a 19% uptick to $28.8 billion.
At the other end of the spectrum, Feldman projects a Q4 operating income of $19.1 billion, slightly above the FactSet Street forecast of $19.0 billion and above the midpoint of the company’s guide for $16 billion to $20 billion.
As for the outlook, Feldman is eyeing revenues of $158.0 billion, amounting to 10.4% growth, which is slightly below FactSet expectations of $158.6 billion. “Importantly,” says the 5-star analyst, “we expect to see strength in AWS, given companies attempting to incorporate AI-related functionalities.” Feldman is expecting an operating income of $17.6 billion, although that falls under FactSet consensus at $18.3 billion.
“Overall,” Feldman summed up, “we believe Amazon should continue to gain profitable market share by leveraging its sticky Prime member base, small business relationships, and technological edge. Amazon’s focus on newer business—grocery, pharmacy, fashion, home, private brands, third-party, same-day/one-day delivery, and Amazon Logistics— should make it more valuable.”
Bottom line, Feldman rates AMZN shares an Outperform along with a price target of $275, suggesting the stock will climb ~16% higher in the months ahead. (To watch Feldman’s track record, click here)
Feldman is far from the only AMZN bull. In fact, barring one skeptic, all of Feldman’s colleagues are bulls too; the stock claims a Strong Buy consensus rating based on 40 Buys vs. 1 Hold. At $260.42, the average target factors in a 12-month gain of ~10%. (See Amazon stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
