Amazon Analyst Sees Upside Fueled By Ad Spend Growth In July, October Prime Day Events

Amazon Analyst Sees Upside Fueled By Ad Spend Growth In July, October Prime Day Events
  • Mizuho analyst James Lee reiterated a Buy on Amazon.com Inc AMZN and a $155 price target.
  • Lee recently hosted an investor call on Amazon Advertising with a leading ad-tech platform. 
  • The ad-tech platform shows Amazon’s SSS-ad-spending growth accelerated 15 points in 3Q22 due to July’s Prime Day. 
  • October’s Prime Day started well, pulling-forward demand and alleviating logistical constraints.
  • Ad-pricing stabilized in CPG and several key discretionary categories after several quarters of consistent decline, indicating pricing has firmed, and Q4 should turn positive. 
  • He was comfortable with consensus, given positive industry checks and conservative 2H22 seasonality expectations. 
  • Increased fulfillment efficiency, depreciation benefits, and merchant fees could provide an OPI guidance cushion. 
  • Given the historically low valuation, he believes risk-reward is optimistic heading into results. 
  • Price Action: AMZN shares traded lower by 0.80% at $115.42 on the last check Wednesday.
  • Photo Via Company

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