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Analysts are telling customers not to overreact to a sales forecast below Amazon's expectations.
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The big drop in
Amazon.com
of the
The stock price creates an excellent buying opportunity, say analysts.
Shares of Amazon (symbol: AMZN) fell by almost 10%, to reach USD 1,610 on Friday, a day after the company posted a turnover of USD 56.6 billion for its third quarter, $ 500 million lower than Street forecast. More troubling for some, his December earnings forecast for the December quarter was between $ 66.5 and $ 72.5 billion. Even the top of the range was below the $ 73.8 billion forecast by the Wall Street consensus.
If fourth quarter sales reached the mid-point of the expected range, this would represent a 15% year-on-year growth, compared to the 29% achieved by Amazon in the third quarter.
Wall Street companies usually tell customers not to overreact. Deutsche Bank analyst Lloyd Walmsley reiterated his purchase note for the Amazon stock because of his confidence in other long-term opportunities, such as groceries, international markets and advertising.
"We think that even though the growth of core retail business may seem to be slowing down soon … The company can use several levers to reactivate itself," wrote Walmsley on Friday. "We continue to believe that there is a huge track ahead."
The analyst reiterated his price target of $ 2,300 for the title.
Colin Sebastian, an analyst at Baird, said the performance of Amazon companies with higher profit margins, such as cloud computing and advertising, is more relevant for investors.
"The deceleration in revenue growth reflects [a] move to higher margin services – this is not a bad thing, "he wrote Friday.
Sebastian reaffirmed its Outperform rating and its $ 2,100 price target for Amazon.
Similarly, Goldman Sachs analyst Heath Terry reiterated his purchase note for Amazon, saying he was still optimistic that the company was in the early stages of filming several major markets. Terry Goldman believes that Amazon offers the best potential rewards, relative to risk, among Internet shares, as the move from cloud computing is still in its infancy, as traditional retailing continues to grow. move online and that the company wins market share. Advertisement.
Write to Tae Kim at [email protected]
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