Amazon shares hit record high after blowout earnings results

Amazon (AMZN) shares reached a record intraday high after reporting first-quarter results and steerage that blew previous expectations. 

Shares of the e-commerce large jumped as a lot as 2.4% to succeed in as high as 3,553.39 Friday morning in New York. The inventory misplaced steam in afternoon buying and selling, nonetheless, and in the end ended decrease by 0.1% to three,467.42, or in need of a record closing high. 

The surge got here after the corporate posted one more quarter of ballooning gross sales and earnings, simply exceeding expectations as a pandemic-driven pick-up in on-line purchasing and cloud demand confirmed no indicators of slowing down.

“Amazon undoubtedly has a ton of momentum coming out of the pandemic. I think that one thing that we have heard from investors is they are worried about their ability to comp the comp,” Anthony Chukumba, Loop Capital managing director, instructed Yahoo Finance on Friday. “We’re not concerned about that.”

“One thing to consider is they now have over 200 million Prime members. That’s up over a third from the last time they gave us a number, which was in January of 2020,” he added.” In addition to that, Prime members are ordering more often, and they’re ordering a wider variety of products. And so, we think that they picked up a ton of new customers during the pandemic, and the vast majority of those customers are going to remain Amazon customers. And so they have a ton of momentum, and obviously it’ll slow down a bit because you’re going to start the ‘anniversarism’ of really difficult comparisons. But it’s not going to slow down as much as some investors fear.” 

Amazon’s first-quarter net sales jumped 44% to $108.52 billion, marking a second straight quarter with income of greater than $100 billion. The beat was pushed by every of Amazon’s e-commerce, cloud computing and promoting segments, with on-line retailer web gross sales of $52.9 billion and Amazon Web Services web income of $13.5 billion every topping estimates. Earnings per share of $15.79 had been simply above the $9.69 anticipated.

The Seattle-based firm additionally signaled this power was set to proceed into the present quarter. Amazon projected web gross sales of between $110 billion and $116 billion for a soar of as a lot as 30% year-over-year, with its purchasing vacation Prime Day moved again to the second quarter this 12 months. Operating revenue will doubtless are available between $5 billion and $eight billion, even together with an estimated detrimental affect of one other $1.5 billion resulting from virus-related prices. 

The stronger-than-expected results and steerage additionally catalyzed quite a few worth goal will increase throughout Wall Street corporations. Among these had been JPMorgan Chase analyst Doug Anmuth and Cowen analyst John Blackledge, who every raised their worth targets on the inventory to $4,600 from $4,400. Raymond James analyst Aaron Kessler raised his worth goal to $4,125 from $4,000. 

“Amazon delivered strong 1Q results driven by upside in core retail (with International acceleration), as well as accelerating growth in higher margin segments including AWS and advertising,” Kessler wrote in a be aware Thursday night. He maintained an Outperform ranking and elevated his worth goal “given 1) continued momentum in eCommerce sales; 2) Continued leadership and momentum in cloud; 3) robust advertising growth; and 4) an improving margin profile driven by retail scale efficiencies, AWS, and advertising.” 

Shares of Amazon have risen 6.6% for the year-to-date by way of Thursday’s shut, underperforming towards the S&P 500s 12% acquire over that point interval.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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