Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Should You Buy Amazon ETFs Ahead Of Q3 Earnings?

By Zacks Investment ResearchStock MarketsOct 21, 2019 11:00PM ET
www.investing.com/analysis/should-you-buy-amazon-etfs-ahead-of-q3-earnings-200476171
Should You Buy Amazon ETFs Ahead Of Q3 Earnings?
By Zacks Investment Research   |  Oct 21, 2019 11:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Amazon (NASDAQ:AMZN) is set to release third-quarter 2019 results on Oct 24 after market close. Being a market leader in online e-commerce, it is worth taking a look at the company’s fundamentals ahead of its results (see: all the Consumer Discretionary ETFs here).

Amazon has shed 11% over the past three months, easily underperforming the industry’s average decline of 3.9%. This might reverse given the positive earnings estimate revision trend, which is generally a precursor to an earnings beat, and attractive fundamentals.



Inside Our Methodology

Amazon has a Zacks Rank #4 (Sell) and an Earnings ESP of +35.13%. Betting on stocks that have a combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) usually leads to profits. Our research shows that the chance of a positive earnings surprise is as high as 70% for stocks with this combination. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The stock has seen positive earnings estimate revision of five cents over the past 30 days for the third quarter. Analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator for the stock. However, the Zacks Consensus Estimate represents a substantial year-over-year decline of 22.43% (read: A Look at Consumer ETFs as Confidence Slips).

Amazon’s earnings surprise history is impressive, with a positive earnings surprise of 34.02% on average for the last four quarters. Additionally, the company is expected to report revenue growth of 21.2%. The stock has a Growth Score of A and falls under a top-ranked Zacks industry (top 39%).

According to analysts polled by Zacks, Amazon has an average target price of $2,285, with nearly 96% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.


What to Watch?

Investors will keep a close eye on the update for increasing regulatory scrutiny, as well as Amazon Web Services growth and margins. This is because the online e-commerce behemoth is facing heightened regulatory scrutiny with antitrust officials in the United States and investigations into the company’s business practices from European Union.

In its second-quarter earnings release, the company offered upbeat revenue guidance for the third quarter with estimated growth of 17-24% to $66-$70 billion. Additionally, most analysts believe costs to ramp up one-day shipping and a slowdown in the cloud services business could weigh on profits.

ETFs to Buy


Given this, ETFs with the highest allocation to this online behemoth will be in focus ahead of its earnings announcement. These funds are likely to gain if Amazon delivers an earnings beat. We have highlighted seven ETFs that have AMZN as the top firm in their portfolio:

ProShares Online Retail ETF ONLN: Amazon makes up for 24% in the fund’s basket (read: Is Holiday Season Frenzy Fading for Retail ETFs?).

Fidelity MSCI Consumer Discretionary Index ETF FDIS: It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Amazon makes up for 23.4% in the fund’s basket.

Consumer Discretionary Select Sector SPDR Fund (TSXV:XLY) : The fund carries a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Amazon accounts for 21.8% share (read: 6 ETFs to Buy If Mini Trade Deal is Cut).

Vanguard Consumer Discretionary ETF (HN:VCR) : This ETF has a Zacks ETF Rank #2 with a Medium risk outlook. Amazon has 20.9% allocation.

VanEck Vectors Retail ETF (TSXV:RTH) : The fund has a Zacks ETF Rank #3 with a Medium risk outlook. Amazon makes up for 19.4% of the assets (read: Is the Retail Picture Truly Gloomy? ETFs in Focus).

iShares Evolved U.S. Discretionary Spending ETF IEDI: Amazon makes up for 11.6% in the fund’s basket.

iShares U.S. Consumer Services ETF IYC: It carries a Zacks ETF Rank #3 with a Medium risk outlook. Here, AMZN takes 9.8% share.

iShares Global Consumer Discretionary ETF (SG:RXI) : AMZN accounts for 9.5% share in the basket.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>



Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Consumer Discretionary Select Sector SPDR Fund (XLY): ETF Research Reports

Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports

iShares Global Consumer Discretionary ETF (RXI): ETF Research Reports

iShares U.S. Consumer Services ETF (IYC): ETF Research Reports

Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports

VanEck Vectors Retail ETF (RTH): ETF Research Reports

iShares Evolved U.S. Discretionary Spending ETF (IEDI): ETF Research Reports

ProShares Online Retail ETF (ONLN): ETF Research Reports

Original post

Zacks Investment Research

Should You Buy Amazon ETFs Ahead Of Q3 Earnings?
 

Related Articles

Tim Knight
Multiple Data Points Are All Bad By Tim Knight - Jun 15, 2021 5

Several major economic data points were released this morning, and they’re all bad. Core Retail Sales expected +0.4%, actual -0.7% – Big miss Producer Price Index expected 0.5%,...

Gary S. Morrow
JP Morgan Extends Sell Off By Gary S. Morrow - Jun 15, 2021 1

Shares of JPMorgan Chase (NYSE:JPM) remain under pressure. In today’s early trade the stock is off 1.8%, top loser in the Dow Jones Industrials. This is JPM’s seventh...

Should You Buy Amazon ETFs Ahead Of Q3 Earnings?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email