By Sam Boughedda
Tigress Financial analysts reiterated a Buy rating but cut its price target on Amazon (NASDAQ:AMZN) to $192 from $232 in a note to clients Wednesday to reflect a re-rating of valuation and growth rate adjustments.
The analysts told investors in a research note that it continues to see strong growth trends for Amazon driven by its powerful Prime Membership momentum, increasing traction with third-party sellers, strength in AWS, and rapidly growing advertising revenue that will continue to drive further growth and share price gains. In addition, they view the recent pullback as a "major buying opportunity."
"Unfortunately, AMZN was the latest big tech name to report disappointing results sending the shares to their lowest level since April 2020. Even though reported results were disappointing on the surface, AMZN continues to report impressive results for a company its size. Q3 net sales increased 15% Y/Y to $127.1 billion. North America sales increased 20% Y/Y to $78.8 billion, and international sales decreased 5% Y/Y to $27.7 billion due to ongoing global unrest, including difficulties in Europe and China," explained the analysts.
On AWS, they commented that while many large companies have indicated a near-term slowing in enterprise IT spending, they believe enterprise spending will return and is significantly important to major companies maintaining their competitive technological advantage and ongoing IT cost reduction, which continues to drive ongoing cloud migration and increasing IT expenditures.
"AMZN's industry-leading positions in critical areas, along with its innovative ability, will further drive increasing Economic Profit that will continue to drive long-term shareholder value creation. We believe a significant upside in the shares exists, and our 12-month target price of $192 represents a potential return of over 100% from current levels," the analysts concluded.