Sign InAmazon Stock Analysis: Bullish Outlook Predicts Potential Gains as a Buy
Summary
As of June 21, 2023, Amazon's stock closed at $124.83 with a strong momentum, and both technical and fundamental analysis indicate a bullish trend, leading to a buy rating and potential gains for investors.
Introduction
Amazon.com Inc. (AMZN) is a leading e-commerce and technology company operating on a global scale, offering a diverse range of products and services like online retailing, cloud computing, digital streaming, artificial intelligence, and more. In this stock analysis, we will assess Amazon's technical and fundamental performance and predict its price for the next trading day and the upcoming week. We will also provide a final evaluation of the stock as a Strong Sell, Sell, Hold, Buy, or Strong Buy.
Technical Analysis
Amazon closed at $124.83 on June 21, 2023, with a slight decrease of $0.95 (-0.76%) from the previous day. It traded between $123.85 (low) and $126.73 (high). The stock is currently below its year high of $146.57 and above its year low of $81.43.
The stock has shown a strong momentum with RSI14 (Relative Strength Index 14) at 60. The 50-day moving average of $112.85 indicates that the stock is in an uptrend, while the 200-day moving average of $104.26 suggests that the longer-term outlook is bullish as well.
The MACD (Moving Average Convergence Divergence) of 5.23 for the 3-month period also indicates a bullish trend as the MACD line is above the signal line.
Fundamental Analysis
With a market cap of $1.28 trillion, Amazon is one of the largest companies globally. The stock has an EPS (Earnings Per Share) of $0.41, and a P/E (Price-to-Earnings) ratio of 304.46, reflecting high investor expectations for future earnings growth. There are currently 10.26 billion shares outstanding.
Based on the discounted cash flow (DCF) model, the stock's intrinsic value is estimated at $130.12, which is slightly above its current market price. Target price estimates are provided by analysts, with a high target of $270, a low target of $97.78, and a consensus target of $161.38. The median target price is $159.50.
Recent news about Amazon has brought attention to the company, including the FTC's case against Amazon regarding Prime enrollment practices, which some experts argue is on "somewhat shaky legal ground." Other news highlights Amazon Prime Day & Target Circle Week as significant events for the companies and consumers. According to a JPMorgan analyst, Amazon may soon surpass Walmart as the largest U.S retailer.
Price Prediction
Considering the technical and fundamental analysis, Amazon's stock seems to be in a bullish trend. For the next trading day on June 22, 2023, we predict the stock will follow this positive trend and may close slightly above the previous close. For the upcoming week, we expect Amazon's stock price to further move upwards, potentially nearing the 52-week high if the positive momentum continues.
Stock Evaluation
Taking into account the technical and fundamental analysis, we categorize Amazon's stock as a Buy. The stock's bullish trend, along with positive news and growth expectations, suggests potential gains for investors. Although the stock is currently trading below its median target price, positive developments in the market may boost investor confidence and provide favorable conditions for further growth. However, as with any investment, prospective buyers should consider their risk appetite and financial goals before investing.
