Selected stock price target news of the day - August 04, 2023

By: Matthew Otto

Amazon Delivers Q2 Results, AWS Growth Spurs Analyst Optimism

Amazon beat analysts’ estimates and provided positive guidance for Q3. The company’s Q2 earnings per share (EPS) was $0.65 on revenue of $134.4 billion, exceeding estimates of $0.35 on revenue of $131.45 billion. Net sales in North America rose by 11% to $82.5 billion year-on-year in Q2. A significant highlight was the performance of Amazon Web Services (AWS), its cloud revenue segment, which grew by 12% to $22.1 billion, surpassing estimates of 10.2%. AWS accounted for 70% of Amazon’s operating profit during the quarter.

Analysts have expressed optimism about Amazon’s future growth, with a key positive being the improving trends for AWS. UBS analyst Lloyd Walmsley noted an “inflection second quarter” for Amazon and raised the target price to $175 from $150, designating Amazon as UBS’s top pick across the entire Internet sector. Walmsley believes AWS could experience a new demand-driven inflection due to generative artificial intelligence, while retail margins are expected to continue improving into the next year. Similarly, BofA analyst Justin Post lifted the price target to $174, citing expectations of further margin benefits from increasing retail efficiency and anticipated acceleration in AWS growth.

Amazon’s performance in earnings season, as compared to other U.S. technology companies, has been a major driver for the company’s stock. Analysts at Citi give credit to Amazon’s accelerating revenue growth and expanding margins in its e-commerce business. They raised the target price to $167 from $145, emphasizing that the company is well-positioned to deliver greater margin expansion, making its shares one of their top picks.

Analyst Raised Amazon Price Targets After Strong Q2 Results

Mizuho analyst James Lee maintains a Buy and raises the price target from $160 to $180.
Citigroup analyst Ronald Josey reiterates a Buy and increases the price target from $145 to $167.
B of A Securities analyst Justin Post maintains a Buy and raises the price target from $154 to $174.
Needham analyst Laura Martin stays with a Buy rating and raises the price target from $150 to $160.
Morgan Stanley analyst Brian Nowak maintains an Overweight and increases the price target from $150 to $175.
Evercore ISI Group analyst Mark Mahaney reiterates with an Outperform and upgrades the price target from $150 to $190.
JMP Securities analyst Nicholas Jones remains with an Outperform rating and upgrades the price target from $140 to $175.
JP Morgan analyst Doug Anmuth maintains an Overweight and raises the price target from $145 to $180.
Telsey Advisory Group analyst Joseph Feldman retains with an Outperform and increases the price target from $145 to $160.

Analyst Laura Martin (NEEDHAM) currently has the highest performing score on AMZN with 16/19 (84.21%) price target fulfillment ratio. Her price targets carry an average of $22.55 (20.08%) potential upside. Amazon stock price reaches these price targets on average within 136 days.

Apple Surpasses Expectations with $81.8 Billion in Q3 Fiscal Year 2023 Revenues

Apple’s Q3 Fiscal Year 2023 earnings reported a revenue of $81.8 billion, surpassing expectations of $81.73 billion despite a 1% decline compared to the same period last year. The company saw their performance in emerging markets and set revenue records in countries like India, Indonesia, Mexico, and others. While the Products segment saw a slight decline, the Services segment achieved an all-time revenue record of $21.2 billion, indicating the strength of Apple’s ecosystem with over one billion paid subscriptions.

Apple’s gross margin for the quarter was 44.5%, reaching a record level for the June quarter, attributed to effective cost management and a shift towards services. The company’s net income was $19.9 billion, marking a 5% increase year-over-year, with diluted earnings per share reaching $1.26, $0.07 better than the analyst estimate of $1.19. As Apple looks ahead to the September quarter, it expects similar revenue performance and plans to focus on the launch of the iPhone 15 and the growth of its services.

D.A. Davidson’s Tom Forte believes Apple’s current premium valuation lacks sufficient justification in their revenue forecasts. He also notes that upcoming iPhone models, such as the iPhone 15, may not receive as much subsidy from wireless carriers, potentially impacting sales. KeyBanc analysts raise concerns about a slowdown in the U.S. upgrade cycle, leading to weaker revenue. Despite these cautious views, Wedbush’s Daniel Ives is optimistic about the future, anticipating a “mini supercycle” with the launch of the iPhone 15 and continued growth in services revenue.

Apple Receives Mixed Analyst Recommendations: Price Targets Revised

Morgan Stanley analyst Erik Woodring maintains an Overweight rating and lowers the price target from $220 to $215.
Raymond James analyst Srini Pajjuri reiterates an Outperform rating and raises the price target from $180 to $200.
Barclays analyst Tim Long maintains an Equal-Weight rating and increases the price target from $149 to $167.
Citigroup analyst Atif Malik reiterates with a Buy rating and a $240 price target.
Needham analyst Laura Martin reiterates with a Buy rating and a $195 price target.

Analyst Jeriel Ong (DEUTSCHE BANK) currently has the highest performing score on AAPL with 17/18 (94.44%) price target fulfillment ratio. His price targets carry an average of $4.81 (4.75%) potential upside. Apple stock price reaches these price targets on average within 35 days

Wayfair’s Strategy Leads to Surpassing Q2 Expectations

Wayfair has exceeded expectations in its second quarter, reporting adjusted earnings of $0.21 per share, compared to the expected loss of $0.73 per share. The company’s net loss for the quarter was 41 cents per share, or $46 million, and its total net revenue of $3.17 billion surpassed estimates for $3.10 billion. Despite a 7.6% decrease in active customers from the previous year, Wayfair’s net revenue per active customer in the 12 months ended June 30 increased to $545 from $537, signaling improving purchasing patterns.

CEO Niraj Shah attributed the company’s success to its focus on lowering costs, emphasizing the basics, and building stronger customer and supplier loyalty. This approach has led to a structural improvement in gross margins, which reached 31.1% – the highest ever for the company. Analysts at Wells Fargo have upgraded Wayfair shares to Overweight from Underweight and raised their price target to $100 from $35, signaling confidence in the company’s potential for high growth and market share expansion.

Analysts Provide Mixed Recommendations

Credit Suisse analyst Stephen Ju maintains with an Outperform rating and raises the price target from $118 to $139.
Barclays analyst Adrienne Yih reiterates with an Equal-Weight rating and increases the price target from $40 to $85.
Stephens analyst Nicholas Zangler upgrades from Equal-Weight to Overweight and the price target from $34 to $105.
Needham analyst Anna Andreeva maintains a Buy rating and raises the price target from $80 to $100.
Truist Securities analyst Youssef Squali remains with a Buy rating and upgrades the price target from $56 to $96.
Canaccord Genuity analyst Maria Ripps maintains a Buy rating and increases the price target from $86 to $98.
Wells Fargo analyst Zachary Fadem upgrades from Underweight to Overweight and announces a $100 price target.
Gordon Haskett analyst Chuck Grom upgrades from Hold to Buy and the price target from $65 to $110.

Analyst Ygal Arounian (CITI) currently has the highest performing score on W with

2/4 (50%) price target fulfillment ratio. His price targets carry an average of $8.05 (15.89%) potential upside. Wayfair stock price reaches these price targets on average within 22 days