BofA analyst Justin Post, who notes that the firm’s checks for advertising spending on Amazon “remain strong,” expects Amazon’s 2024 ad growth to aided by new initiatives such as more ads in Prime Video and the ramp of new ad partnerships. The firm, which argues that ad revenue strength has the potential to contribute to margin upside, believes Amazon’s North American retail margins still have significant room to grow with potential to reach 7% based on Amazon’s commentary and its advertising estimates, which it calls out as “well above Street estimates at 5.7% in 2025.” BofA keeps a Buy rating and $168 price target on Amazon shares.
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