The holiday season, which essentially runs from November 1st to December 31st, is a busy and bountiful period in the ecommerce universe and that includes the biggest player in the biz – Amazon (NASDAQ:AMZN).
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According to Truist’s Youssef Squali, a 5-star analyst rated in the top 2% of the Street’s stock pros, it seems that Amazon’s Q4 results are going to be an investor-pleasing affair, even though we’re only halfway through this year’s holiday season.
“We believe that Amazon’s strong performance during Black Friday weekend bodes well for the remainder of the quarter,” Squali opined.
Although Amazon did not provide specific details, the company did say that sales over the extended Black Friday and Cyber Monday event (Nov. 17 – Nov. 27) grew on a year-over-year basis to reach record levels.
Based on Truist data, Squali notes that quarter-to-date (until November 26) North America revenue growth is “tracking ahead” of consensus expectations. “This trend reflects higher than expected consumer spending across the platform’s massive selection, helped by millions of deals, speedy delivery and emerging offerings like BwP (Buy with Prime),” Squali explained.
As such, for Q4, Squali is calling for North American Online Revenues to hit $99 billion, above the Street’s forecast of $97.9 billion. Additionally, the analyst says, should the momentum continue, Squali anticipates that about 50% share of US eCommerce GMV (gross merchandise volume) will be claimed by Amazon in Q4, a slight increase on the 49% noticed during the same period last year. In total, Squali is calling for Q4 revenues of $167.1 billion, amounting to a 12% y/y increase and ahead of the Street’s $165.7 forecast.
There’s no reason to think momentum is about slow down, either. Per the NRF (national retail federation), consumers in the US are still “only halfway done with their planned holiday shopping,” an indication there remains “ample runway ahead.”
All told, Squali reiterates a Buy rating on Amazon shares along with a $176 price target. Should the figure be met, investors will be pocketing returns of 21% a year from now. (To watch Squali’s track record, click here)
Amazon stands out as a name with huge coverage on Wall Street and all of it positive. Based on Buys only – 42, in total – the stock claims a Strong Buy consensus rating. The $176.50 average target is practically the same as Squali’s objective. (See Amazon stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
