Analysts optimistic about Amazon’s (AMZN.US) Earnings Reports and Prime Day performance

Analysts are anticipating a potential increase in Amazon’s stock price as the company gets ready to release its second-quarter Earnings Reports. Despite experiencing a relatively stagnant stock price performance earlier this year, analysts are optimistic about a possible upward movement in Amazon’s (AMZN.US) stock price following the release of the upcoming second quarter Earnings Reports.

According to a report by Truist Securities Analyst Youssef Squali as reported by Zhitong Finance APP, Amazon’s Target Price has been upgraded from $226 to $250, indicating a potential 13% increase from the previous closing price of $220.46. Squali has maintained a ‘Buy’ rating for Amazon, projecting that the company’s performance in the second quarter is expected to surpass market expectations.

Squali highlighted in the report that Amazon is likely to benefit from the resilient consumer behavior in North America that remains unaffected by macroeconomic conditions or tariffs. This is expected to drive Amazon’s revenue and profits beyond what the market anticipates.

Despite concerns in the market regarding rising tariffs leading to increased Commodity prices and subsequently suppressing consumer spending, Amazon’s CEO Jassy reassured in an interview this week that the company has not experienced any significant spike in Commodity prices. Jassy mentioned that Amazon had made advance purchases several months ago to mitigate tariff-related uncertainties, ensuring stable prices and sufficient inventory.

Although Amazon’s stock price has only seen a slight 0.4% increase this year, significantly lagging behind the S&P 500 Index’s 5.7% surge, Squali believes that a positive guidance in the upcoming Earnings Reports could pave the way for an uptick in the stock price.

FactSet data reveals that Amazon is scheduled to unveil its second-quarter Earnings Reports around July 31st, following the company’s summer Prime Day promotion from July 8th to 11th. This year’s Prime Day is expected to span twice the duration of the 2020 promotion, potentially driving a peak in sales.

Prime Day serves as a crucial event offering exclusive discounts to Amazon’s Prime members across various products from both Amazon and third-party sellers on the platform. Analysts are eagerly waiting to see if Amazon’s management will disclose preliminary sales data from the Prime Day promotion during the Earnings Reports conference call.

Bank of America analyst Justin Post predicts that this year’s Prime Day could generate a total Commodity Trade volume (GMV) of $21.4 billion, marking a substantial 60% year-on-year increase. Post also supports Amazon with a ‘Buy’ rating and a Target Price of $248, aligned with Truist’s forecast.

Despite a slight decline in Amazon’s stock price on Wednesday closing at $219.98, analysts remain optimistic that strong performance showcased in the second-quarter Earnings Reports, especially driven by robust consumer data from Prime Day, could propel Amazon’s stock price to new highs.