Daily Update - April 28, 2023

Selected stock price target highlights of the day

By Matthew Otto

AMZN

Amazon.com has reported its financial results for the first quarter ended March 31, 2023. The company’s net sales increased by 9% to $127.4 billion in the first quarter, compared with $116.4 billion in the first quarter of 2022.

The AWS segment sales increased by 16% year-over-year to $21.4 billion. Operating income increased to $4.8 billion in the first quarter, compared with $3.7 billion in the first quarter of 2022. Amazon’s net income was $3.2 billion in the first quarter, or $0.31 compared with a net loss of $3.8 billion, or $0.38 in the first quarter of 2022. However, on the earnings conference call, an Amazon executive said cloud spending was decelerating with April revenue growth down about 5 percentage points compared to the first quarter’s segment.

Amazon’s operating cash flow increased by 38% to $54.3 billion for the trailing twelve months, compared with $39.3 billion for the trailing twelve months ended March 31, 2022. The company’s free cash flow improved to an outflow of $3.3 billion for the trailing twelve months, compared with an outflow of $18.6 billion for the trailing twelve months ended March 31, 2022.

Amazon provided an outlook for the second quarter in their first-quarter earnings report. The company said it expects second-quarter net sales to be between $127.0 billion and $133.0 billion, implying growth of 5% to 10% from the second quarter of 2022. The range is roughly in line with Wall Street’s second-quarter forecast of $129.9 billion. However, the company’s outlook for operating income was a bit lower than expected, with a forecast of $2 billion to $5.5 billion, which is below analysts’ expectations for $4.4 billion.

Wall Street Action

Credit Suisse analyst Stephen Ju maintains his Outperform rating on Amazon.com and increases the price target from $140 to $142. However, in another report, Ju reaffirms his Outperform rating but lowers the price target from $150 to $140.
Goldman Sachs analyst Eric Sheridan maintains his Buy rating on Amazon.com and raises the price target from $145 to $165.
JMP Securities analyst Nicholas Jones reiterates his Market Outperform rating on Amazon.com and maintains the $140 price target.
BofA Securities analyst Justin Post keeps his Buy rating on Amazon.com and lifts the price target from $135 to $139.
Barclays analyst Ross Sandler maintains his Overweight rating on Amazon.com but reduces the price target from $150 to $140.
Baird analyst Colin Sebastian continues to recommend Amazon.com as Outperform and raises the price target from $125 to $130.
Needham analyst Laura Martin reiterates her Buy rating on Amazon.com and retains her $120 price target.
Wolfe Research analyst Deepak Mathivanan maintains his Outperform rating on Amazon.com and increases the price target from $130 to $140.
JP Morgan analyst Doug Anmuth maintains his Overweight rating on Amazon.com and lifts the price target from $135 to $145.
Telsey Advisory Group analyst Joseph Feldman reiterates his Outperform rating on Amazon.com and maintains the $125 price target.
Jason Helfstein has lifted the price target to $130
Piper Sandler analyst Tom Champion has increased the price target to $130.
UBS analyst Lloyd Walmsley has also raised the price target to $130.

While Amazon stock lost %40 from its value in 2022 there isn’t a single analyst who has their price target below the stock price and some analysts are more bullish than others such as Tigress Financial Ivan Feinseth and Evercore ISI Mark Mahane.

INTC

Intel posted Q1 adjusted earnings per share loss of 4 cents, beating the Wall Street consensus estimate of a 16 cent loss, and Q1 revenue of $11.7 billion, which was above analysts’ expectations of $11.01 billion but was down 36% YoY.

Intel’s CFO, David Zinsner, stated in a phone interview that while the company was still facing a tough macro environment, it was seeing some stability in PC demand and “green shoots” of positive economic momentum in China.

During a conference call with investors, the company predicted that adjusted gross margins would climb above 40% in the second half, having hit historic lows in the first half of the year. In addition, Intel has ramped up the shipping of its most powerful data center chip, codenamed Sapphire Rapids, which had been delayed for over a year. The company forecast a second-quarter revenue range with a midpoint of $12 billion, above analysts’ consensus estimate of $11.75 billion. However, Intel also predicted adjusted losses of 4 cents per share for Q2, worse than the 1 cent per share profit estimated by analysts.

Wells Fargo analyst Aaron Rakers raised the price target on Intel from $26 to $32 but maintains his Equal-Weight rating. Needham analyst Quinn Bolton also raised the price target on Intel from $32 to $36 and maintains a Buy rating. Barclays analyst Blayne Curtis raised the price target from $27 to $30 while maintaining an Equal-Weight rating. Wedbush analyst Matthew Bryson upgraded Intel from Underperform while BMO Capital analyst Ambrish Srivastava raised the price target to $32. Truist Securities analyst William maintained a Hold rating on Intel but raised the price target to $32.

Wall Street Action

Wells Fargo analyst Aaron Rakers raised the price target on Intel from $26 to $32 but kept his Equal-Weight rating.
Needham analyst Quinn Bolton also raised the price target on Intel from $32 to $36 and maintains a Buy rating.
Barclays analyst Blayne Curtis raised the price target from $27 to $30 while reiterating an Equal-Weight rating.
Wedbush analyst Matthew Bryson upgraded Intel from Underperform.
BMO Capital analyst Ambrish Srivastava raised the price target to $32.
Truist Securities analyst William maintained a Hold rating on Intel but raised the price target to $32.

Intel stock price is currently recovering from a rough 2022 in which it lost %40 of its market value. Notable analyst who is short on the stock is Rosenblatt Hans Mosesmann.

NET

Cloudflare shares experienced a sharp decline, dropping as much as 25% in after-hours trading, following the company’s first-quarter results and revised full-year revenue guidance. While Cloudflare beat expectations on adjusted earnings per share, the company missed analyst estimates on revenue. Here are the key details:

Earnings: Cloudflare reported adjusted earnings of 8 cents per share, surpassing the expected 3 cents per share.
Revenue: The company generated $290.2 million in revenue, slightly below the expected $290.8 million.

Cloudflare revised its full-year revenue guidance for 2023, projecting revenue around $1.28 billion, compared to the prior consensus estimate of $1.33 billion. This downward revision significantly deviates from Cloudflare’s previous guidance range of $1.33 billion to $1.34 billion.

Additionally, Cloudflare reported a net loss of $38 million for the quarter, an improvement from the $41 million loss in the same period last year.

Cloudflare’s guidance for the second quarter of 2023 also fell below consensus estimates, with projected revenue between $305 million and $306 million, compared to a consensus estimate of $319 million.

Wall Street Action

Andrew Nowinski, Wells Fargo analyst, rates Cloudflare as Overweight and lowers his price target to $55.
Shrenik Kothari, Baird analyst, has an Outperform rating and lowers the price target to $59.
Alex Henderson, Needham analyst, rates Cloudflare as a Buy and has lowered the price target to $57.
Gabriela Borges, Goldman Sachs analyst, rates a Sell and has reduced the price target to $38.
Trevor Walsh, JMP Securities analyst, rates an Outperform and has trimmed the price target to $60.
Thomas Blakey, Keybanc analyst, has an Overweight rating and lowers the price target to $61.

The stock continues a decline trend in the last two years from its peak at $219 in 2021. The only notable Guggenheim analyst John DiFucci is short on Cloudflare prior to yesterday’s earnings press release.

Above is a snapshot of the top daily stock price target moves on AnaChart