Amazon(US:AMZN) Zhao Yin Guo Ji·2024-08-05 01:23Investment Rating - The report maintains a "Buy" rating for Amazon with a target price of $207.00, down from a previous target of $211.00, reflecting a potential upside of 23.3% from the current price of $167.90 [1]. Core Insights - Amazon's Q2 earnings exceeded expectations, with revenue of $148 billion, a 10% year-over-year increase, and operating profit of $14.7 billion, up 70% year-over-year, driven by AWS's operating profit margin and effective cost control [1]. - Management has provided cautious guidance for Q3 2024, projecting revenue between $154 billion and $158.5 billion, slightly below market expectations, and operating profit guidance of $11.5 billion to $15 billion, also below consensus [1]. - Despite potential short-term challenges in operating profit margin expansion, the long-term growth trend remains intact due to higher-margin services and increased contributions from AWS [1]. Financial Summary - For FY24E, revenue is projected at $629.8 billion, with a year-over-year growth rate of 9.6%. Net profit is expected to reach $51.3 billion, reflecting a significant increase of 68.5% compared to FY23A [3][7]. - The report outlines a decrease in EBITDA forecast by 1% for FY24E, alongside slightly higher-than-expected capital expenditures to support cloud business expansion [1][7]. - The report highlights a strong performance in AWS, with Q2 revenue of $26.3 billion, representing an 18.7% year-over-year growth, and operating profit margin of 35.5% [1][5]. Segment Performance - North America (NA) business revenue reached $90 billion in Q2, a 9% year-over-year increase, with operating profit margin improving by 1.7 percentage points to 5.6% [1]. - International business revenue was $31.7 billion, up 6.6% year-over-year, with operating profit margin increasing by 3.9 percentage points to 0.9% [1]. - Advertising services revenue grew by 20% year-over-year to $12.8 billion, contributing 8.6% to total revenue, up from 7.9% in the previous year [1].