3 Reasons to Like the Look of Amazon Ahead of Earnings

Core Viewpoint - Amazon.com Inc. is showing signs of recovery despite being down 25% from its all-time high, with a recent 10% increase from last week's low indicating potential stabilization in stock performance [1][2]. Group 1: Earnings Expectations - Anticipation is building for Amazon's upcoming earnings report, with expectations that the company will continue its trend of outperforming Wall Street forecasts [2][3]. - Amazon has a strong track record of earnings, having consistently beaten expectations in revenue, earnings, and margins over the past year, with its most recent report marking the most profitable quarter on record [3][4]. - The stock has already experienced a significant correction, which may lower the bar for a positive market reaction if the company delivers solid results [5]. Group 2: Analyst Sentiment - Analyst sentiment towards Amazon is becoming increasingly bullish, with a 12-month stock price forecast of $252.73, indicating a potential upside of 44.97% from the current price of $174.33 [6]. - Major firms such as DA Davidson, Citigroup, and Morgan Stanley have reiterated their Buy ratings, with Morgan Stanley setting a price target of $245, suggesting nearly 40% upside [7][8]. - Analysts are maintaining their positive outlook despite a recent 25% pullback, indicating confidence in Amazon's long-term growth prospects [9]. Group 3: Technical Analysis - Amazon's stock chart is stabilizing after a steep pullback, with a tightening trading range and several higher closes suggesting a potential regain of control by bullish investors [10][11]. - The Relative Strength Index (RSI) has improved from oversold conditions, indicating easing selling pressure and a more stable base forming between $170 and $180 [11]. - If momentum continues, a rebound towards the $190–200 range is plausible ahead of the earnings report, supported by bullish analyst commentary and historical performance [12].