Bank Of America: Watch This Twist In Amazon's Earnings

Bank of America issued an earnings preview for Amazon.com, Inc. AMZN ahead of its first quarter earnings announcement on Thursday. Bank of America rates Amazon as a Buy with a $400 price target. Analyst Justin Post and Paul Bieber wrote, "Amazon is an eCommerce leader with market share and margin potential stemming from its global scale, fulfillment footprint and technology platform investments. We think Amazon's focus on the customers and the buyer experience is right for the Internet, and we consider Amazon a transformational company. We think Amazon is well positioned to capitalize on the global growth of eCommerce and other secular trends such as cloud computing, online advertising, connected devices, and mobile commerce." Strong Amazon Prime adoption, lower gas prices and improving consumer trends in Europe are all positive catalysts that may show upside to Amazon.com's first quarter earnings results. However, Bank of America notes that investment spending in AWS, distribution and content for the website and Amazon Prime may increase expenses and limit the strength of the earnings results. Analysts at Bank of America expect unit growth of 20 percent year-over-year, 21 percent gross profit growth year-over-year and reports of strong international performance and consumer adoption of services. Shares of Amazon last traded at $389.53.