© Reuters. Amazon (AMZN) Valuation ‘Remains Attractive’ – Cowen
By Sam Boughedda
Cowen analysts said they see Amazon (NASDAQ:) accelerating topline and margin upside in a note on Monday, although they cut the firm’s price target on Amazon shares to $195 from $215 per share.
In a research note, they maintained an Outperform rating on the stock, telling investors they expect strong results for Amazon in the third quarter, “driven by Prime Day with rev ests near the high end of guide and ~1.5% above cons.”
“AMZN shares are (31%) YTD and are (13%) since the 2Q22 print, following the 2% increase in ’21 and a 74% gain in ’20. We continue to like AMZN shares as the company exits its historical $78BN fulfillment and logistics investment spend in ’20/’21 coupled with accelerating 2H22 topline growth,” wrote the analysts.
They added that for the third-quarter operating income, they estimate $4.5 billion, above guidance of $0-3.5 billion and the consensus of $3.1 billion on lower gas prices and better fulfillment utilization.
“AMZN valuation at 9.5x ’23E EV/EBITDA remains attractive,” added the analysts. “We trimmed our revenue and Operating Income forecast in 2H22 and lowered our ’23-’27 revenue and Operating Income estimates by ~3% and ~11% annually given various macro and FX headwinds, though our forecast remains above consensus. We now forecast AMZN annual revenue growth of 14.7% annually ’23-’27 (vs. 14.9% prior) and annual Operating Income growth of 41% vs. (vs. ~44% prior.”
Amazon shares are up over 4% in early Monday trading.
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