Bernstein raised its price target for Wayfair (NYSE:W) to $40 from $30 per share and Amazon (NASDAQ:AMZN) to $155 from $140 per share in a note Wednesday, stating that they anticipate a further e-commerce recovery. Amazon was maintained at Outperform, while they kept an Underperform rating on Wayfair.
Analysts said that a lot of focus this year has been on Q2 setting the tone as a jumping-off point for top-line growth acceleration and better profitability through 2H23.
"With FX headwinds abating and a more durable online consumer, count us in that camp of anticipating further eCommerce recovery," they wrote.
"The group, particularly the higher beta names, are pricing in the improvement already. But Q2 earnings will put the thesis to the test and guidance will help dimension the magnitude of the re-acceleration and the incremental margins on this growth. The latter is particularly relevant for AMZN," analysts added.
They noted that in the second quarter, U.S. e-commerce looked a lot like the first quarter, and they have a positive outlook into the second half of the year.
"We estimate the US market grew 8% Y/Y in Q2, in-line with Q1. However, after a soft April, eCommerce recovered and accelerated through the quarter," said analysts. They also stated that Europe is turning the corner, albeit slowly.