Amazon reports fourth-quarter results late Thursday, coming at a time when the company has been buffeted by supply-chain constraints and employment shortages. Amazon stock has been trading sideways for about six months.
The Amazon earnings report comes on a bearish day as Meta Platforms rattled Wall Street with a surprisingly poor earnings report, as other social media and technology stocks tumbled.
Wall Street looks for Amazon to report adjusted earnings of $3.72 a share. That's a 7% drop from the year-ago period but a big improvement from a 51% drop in the previous quarter.
Analysts see revenue of $137.7 billion, according to FactSet, up 10% but representing the company's slowest growth in more than seven quarters. Global supply-chain issues are among the reasons for the slower growth. Labor shortages are another reason.
Wedbush analyst Michael Pachter, in a note to clients, said he expects company revenue and operating income to come in at the low end of Amazon's guidance.
"Our bearish expectations stem from our belief that broader macroeconomic factors such as the ongoing supply chain crisis and full U.S. employment likely limited Amazon's fulfillment capabilities during the holiday quarter," Pachter wrote. "This means that industry-wide shortages in shipping containers, truck drivers, and readily available ports likely impacted delivery times and caused strain for many orders."
Analyst Ratings On Amazon Stock
Pachter has an outperform rating on Amazon stock and a price target of 3,950.
Amazon stock dropped 6.7% to 2,808, during afternoon trading on the stock market today.
Credit Suisse analyst Stephen Ju recently lowered his price target on Amazon stock to 4,000, from 4,100. But he maintained a buy rating.
"Amazon investors have been patiently waiting for the first data points to signal what should output to an acceleration of growth in gross merchandise volume, as well as greater availability of one-day and same-day Prime delivery," Ju wrote in his note to clients.
"We believe we are one step closer to seeing greater proliferation of faster delivery following what was nearly two years of operating with capacity constraints due to heightened demand," he added.
UBS analyst Lloyd Walmsley has a buy rating on Amazon stock and price target of 4,550, down f om 4,700.
A Deeper Push Into Food Retailing
Jefferies analyst Brent Thill thinks Amazon could be going big into food retailing.
"Our expert believes AMZN is making its first serious foray to become a true food retailer, with significant investment in distribution," he said in a note.
Currently, Thill said, Amazon-owned Whole Foods doesn't have a large enough supply chain.
"But our expert sees enough volume in certain markets that could justify the big investment required," Thill said.
Amazon is planning to build its first large-format retail stores, making a new foray into physical outlets and stepping up its battle against Walmart
Thill has a buy rating on Amazon stock and a price target of 4,000.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
