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Amazon Trades Flat After Blowout Quarterly Earnings as Investors Digest Bezos Departure

Tim Smith
·3 minuto per la lettura

Shares in Amazon.com, Inc. (AMZN) were little changed during Tuesday’s extended-hours trading session, despite the Seattle-based e-commerce giant reporting better-than-expected quarterly results. During the earnings call, the company’s founder and CEO Jeff Bezos surprised investors by announcing that he will step down later this year.

The tech titan posted record sales of $125.56 billion in the 2020 holiday quarter, significantly above the $119.7 billion Wall Street had expected. Importantly, it marked the first time the company has generated over $100 billion in revenue in a three-month period. Meanwhile, earnings came in at $14.09 per share, almost double analysts’ forecast of $7.23 a share. The figure also grew 118% from a year earlier.

Management credited the outstanding quarter to record-breaking holiday season e-commerce demand that saw the company deliver over one billion products. It also said a pandemic-delayed Prime Day helped fuel quarterly sales. Looking ahead, the company projects Q1 revenue of between $100 billion and $106 billion, with operating income of between $3 billion and $5.5 billion.

Through Tuesday close, Amazon stock has a $1.7 trillion market cap and trades 68% higher over the past twelve months. Since the start of the year, the shares have gained nearly 4%.

Bezos Departs

In a move few investors saw coming, Bezos announced that Web Services CEO Andy Jassy would replace him in the top job this fall, adding that he will become executive chairman. Bezos, the world’s second-richest person, said he plans to focus on “new products and early initiatives” in his new role, as well as devoting more time to his philanthropic funds and other business interests.

Wall Street View

Last month, JPMorgan analyst Doug Anmuth bumped the firm’s price target on Amazon stock to $4,155 from $4,100 while maintaining an ‘Overweight’ recommendation. Anmuth sees the company’s “strong” e-commerce and public cloud trends continuing in the quarters ahead.

Sentiment remains just as upbeat elsewhere. The stock receives 41 ‘Buy’ ratings, 4 ‘Overweight’ ratings, and 3 ‘Hold’ ratings. Currently, no brokerage firm recommends selling the shares. As of Feb. 3, 2021, Amazon stock trades 12% below the median 12-month Wall Street consensus price target of $3,800.

Technical Outlook and Trading Tactics

Amazon shares staged a pre-earning breakout above a multi-month symmetrical triangle on heavy volume Tuesday as traders bet on a bullish quarterly report. Providing the price holds above the triangle pattern’s top trendline, look for further upside continuation in today’s session.

Those who take a trade should consider using the measured move technique to set a profit target. To do this, measure the initial high to low of the pattern in dollars, and add that amount to the breakout point. For example, add $747 (pattern’s distance) to $3,320 (breakout point) for a profit target of $4,067.

For a look at today’s earnings schedule, check out our earnings calendar.

This article was originally posted on FX Empire

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