Stock • Earnings • Amazon.com 

Earnings season is in full swing — and a range of notable names is Amazon (AMZN).

Stock • Earnings • Amazon.com 

Amazon hasn’t had a great year, with shares falling 27%, as a host of factors, including soaring inflation,

Stock • Earnings • Amazon.com 

ongoing supply chain woes, fears of a recession and rising competition have all taken their toll, and have driven sentiment lower.

Stock • Earnings • Amazon.com 

Wedbush’s Michael Pachter expects Amazon to deliver revenue of $121 billion, above the Street’s forecast for $119.4 billion,

Stock • Earnings • Amazon.com 

and right at the top end of the company’s guidance of $116 – 121 billion.

Stock • Earnings • Amazon.com 

This is because of the aggressive uptick in the U.S. inflation rate, which, amounting to a new four-decade high, surpassed 9% in June.

Stock • Earnings • Amazon.com 

The previous quarter’s average stood at 8%, while it was only 4.8% in the same period a year ago.

Stock • Earnings • Amazon.com 

Soaring inflation can actually be beneficial to Amazon, given it leads to “higher pricing and marketplace fees.

Stock • Earnings • Amazon.com 

Rising inflation along with labor costs are also expected to weigh on the profitability profile,

Stock • Earnings • Amazon.com 

with Pachter believing “incremental costs may be higher than expected, leading to profits at the low end.”

Stock • Earnings • Amazon.com 

All in all, the analyst maintains an Outperform (i.e. Buy) rating on Amazon shares, while his $175 price target implies room for ~45% growth over the coming year.

Stock • Earnings • Amazon.com 

there are currently 41 analyst reviews on file and all but one say Buy, naturally leading to a Strong Buy consensus rating.

Stock • Earnings • Amazon.com 

The average price target is only slightly lower than Pachter’s objective; at $171.84, the shares are expected to generate returns of ~42% over the 12-month timeframe.

Stock • Earnings • Amazon.com 

The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.