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Amazon stock target raised, keeps Overweight on stable revenue outlook

EditorNatashya Angelica
Published 06/28/2024, 01:05 PM
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On Friday, Wells Fargo updated its outlook on shares of Amazon.com Inc (NASDAQ:AMZN), increasing the price target to $239.00 from the previous $234.00. The firm maintained its Overweight rating on the stock. The adjustment comes as the analyst foresees a stable revenue outlook for 2024, with a slight increase in operating income (OI) expectations.

The Wells Fargo analyst noted that the 2024 total revenue projection remains largely the same, with a higher anticipated revenue in North America nearly balanced by increased foreign exchange headwinds affecting international sales. The firm's decision to raise the price target is primarily driven by a 2.5% boost in the 2024 operating income estimate, attributed to better margins within Amazon Web Services (AWS).

According to the analyst, the updated revenue and operating income estimates for Amazon are now 0.4% and 7.3% higher, respectively, than the consensus on Wall Street. The new price target of $239 is based on a 30 times multiple of the estimated earnings per share (EPS) for the year 2026.

Wells Fargo has reiterated its Overweight rating on Amazon shares, also designating the stock as a "Signature pick." This term suggests a strong endorsement of the stock's potential performance. The endorsement by Wells Fargo signals confidence in Amazon's financial outlook, particularly in its cloud computing segment, which continues to be a significant contributor to the company's profitability.

In other recent news, Amazon.com Inc has achieved a $2 trillion market valuation, joining the ranks of other tech giants. This milestone underscores the robust investor confidence in the technology sector. FedEx Corporation (NYSE:FDX) also experienced a significant rise in shares, exceeding 12%, following an optimistic annual profit forecast. The company's positive outlook is attributed to the implementation of cost-saving measures expected to result in $2.2 billion in savings.

Meanwhile, Rivian (NASDAQ:RIVN) is set to provide shareholders with insights into the company's future models and its strategies for cost reduction during its investor day. This event follows a significant $5 billion investment from Volkswagen (ETR:VOWG_p). Analysts are optimistic, anticipating Rivian's first quarterly gross profit to occur in the fourth quarter.

Investors are also keenly awaiting the Commerce Department's release of the personal consumption expenditures (PCE) price index data, which is anticipated to show no change for May. Analysts from Deutsche Bank expect the year-on-year core PCE to hit its lowest in over three years.

In the stock market, Trump Media & Technology Group and other companies associated with former President Donald Trump saw increases ranging from 1% to 8%. The rise in Trump-related stocks came after a debate where President Biden's performance was perceived as weak. These are among the recent developments in the corporate world.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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