Earnings Preview: Successful Restructuring and Resilient Consumption to Boost Amazon's Earnings
By Kyle Rodda | January 31, 2024
Overview
Amazon (AMZN) is set to report its Q4 results after the market closes on February 1, 2024. Analysts are optimistic about the company's performance, anticipating a significant increase in earnings driven by strong consumer activity and effective restructuring efforts.
Expected Earnings Surge
According to Bloomberg, Amazon's earnings per share (EPS) is projected to soar by 2,504% to $0.78, a remarkable increase attributed to the low earnings reported in the same quarter of 2022. Analysts are also forecasting record revenues for Q4, primarily fueled by robust advertising sales and a successful holiday sales period in the U.S.
Focus on Amazon Web Services
Market attention will be particularly focused on the performance and future guidance of Amazon Web Services (AWS), which remains a key growth driver for the company. Despite its leadership position in the market, there are concerns that Amazon may be falling behind competitors in the adoption of artificial intelligence technologies, which could impact future growth.
Analyst Sentiment
Analyst sentiment towards Amazon is overwhelmingly positive, with 69 out of 71 analysts surveyed by Bloomberg recommending a "buy" on the stock. The consensus price target stands at $184.80, indicating a significant premium over the current market value.
Technical Analysis
Amazon's stock has recently shown an upward trend, breaking through technical resistance levels and returning to pre-rate hiking cycle ranges. The stock is currently in overbought territory according to the weekly Relative Strength Index (RSI), although momentum remains positive. Key resistance levels are identified around $170 per share, with support levels at approximately $160 and $140, the latter aligning with the 20-day moving average.