Analysts expect big things from Amazon’s Q1 earnings

Amazon will unveil its first quarter (Q1) results after the market closes on Thursday’s session, with Wall Street analysts expecting great things from the e-commerce giant.

Expectations on Wall Street are so high because billions of people are stuck in lockdown amid the Covid-19 crisis with little to pass the time but spend their money online. And where better to splash the cash than on the world’s largest online marketplace.

In expectation of a surge in online sales, Amazon announced plans to hire 100,000 additional workers to cope with the rise in consumer demand early on in the crisis. The company later announceed it would hire a further 75,000 employees to meet demand.

Amazon shares climb higher amid Covid-19 crisis

Unlike many other stocks, Amazon shares have surged since the outbreak began, with the stock up 21% year-to-date, while the broader market continues to struggle, with the S&P 500 down 12% over the same period.

Even with the company’s share price soaring, Wall Street analysts remain bullish about the stock and believe that shares could climb even higher in 2020.

Of the 43 analysts offering 12-month price targets for Amazon the median target sits at $2525, with a high estimate of $2900 and a low estimate of £1850. The median estimate represents a 9.12% increase from its $2314.07 closing price on Tuesday.

According to Amazon’s own guidance, it forecast revenue generation of between $69 billion to $73 billion in Q1 2020. However, its guidance came before the Covid-19 pandemic took hold, with analysts expecting the e-commerce company to exceed its own guidance, with Wall Street’s consensus revenue forecast sitting at $73.06 billion, while profits are forecast to hit $6.32 per share.

‘Over the last several weeks, Amazon’s share of essential products, like health and household supplies as well as groceries, has ramped significantly and we believe this demand can lead to greater consumer wallet share gains longer term,’ JMP Securities analyst Ronald Josey said in a note to investors.

‘With traditional retail likely less of a competitor going forward as brick-and-mortar retailers close and/or significantly reduce footprints, we believe Amazon is among the best positioned to benefit from rising e-commerce trends.’

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