Friday, July 27, 2018

"Every major Wall Street analyst on the internet giant's earnings report" (AMZN)

We'll be back with more about why we focused on the cloud stuff in yesterday's "Ahead of Amazon's Earnings: I've Looked at Clouds From Both Sides Now (AMZN; GOOG)". For now this segment information from the Q2 press release is the TL;DR:
Operating income: AWS  $1.642 billion
Total operating Income  $2.983 billion
Yes, the cloud business accounted for 55% of the company's operating income.

Here's CNBC with the analysts:
Amazon shares rallied after the e-commerce giant reported a second-quarter profit that doubled Wall Street's expectations.
Amazon's stock jumped more than 4 percent in premarket trading Friday.
"Amazon continues to perform at a level well-above its mega cap internet peers," Barclays said in a note.
"In a critical time, Amazon's stellar sales and burgeoning margin expansion helped decouple it from its FANG peers," said Nomura Instinet.
Here's a wrap of all the major analyst opinions.

J.P. Morgan (Overweight):

"Overall, Amazon remains one of our top picks and is on our Analyst Focus List. Amazon has now shown significant profit upside two quarters in a row, and while revenue and unit growth were modestly below expectations, 26 percent year over year FXN growth ex-Whole Foods Market is still strong, and only a 50 basis points of sequential deceleration off a large base. Importantly, we believe any revenue softness will be overshadowed by the profit upside. We reiterate our Overweight rating & are establishing a 2019 price target of $2,200 based on our SOP analysis."

Barclays (Overweight):

"Amazon continues to perform at a level well-above its mega cap internet peers, with revenue and operating income that was in-line and 68 percent above consensus respectively. Amazon Web Services revenue accelerated once again for the third quarter in a row. Operating income growth of 79 percent was the stand-out once again, and retail margins are also expanding at the highest rate in recent years. Valuation and sentiment continue to push the upper limits, but we believe the execution is justifying further upside for shares, as our operating income increases another 20 percent or more in the out year on this result. Amazon remains one of our favorite ideas in mega cap."

Bank of America (Buy):

"No change to our thesis view that strong growth of Amazon's higher-margin businesses (cloud, advertising, 3P) will be the key sentiment drivers for 2018 and can continue to drive profitability upside. We view Amazon as having the least amount of long-term disruption risk in the FANG (Facebook, Amazon, Netflix and Google) group. We reiterate our Buy rating and raise our PO to $2,200 from $1,840 based on higher estimates and multiples in our sum of the parts analysis."

Credit Suisse (Outperform):...


The stock is up $62.14 (+3.44%) at $1,870.14.