Sign InAmazon Stock Shows Bearish Trend Ahead of Earnings, but Analysts Remain Bullish
Summary
Amazon.com, Inc. (AMZN) has a significant market presence and a market capitalization of $1.23 trillion, with investors willing to pay a high price for its promising return and growth; technical indicators and moving averages suggest a recent downtrend, but an overall upward trend in the longer term; recent negative press regarding workplace conditions could potentially impact the stock's performance, but analyst consensus leans towards buying with a potential upside of 37%; based on the overall assessment, Amazon is evaluated as a 'Buy' with the need for constant monitoring of market conditions and news updates. (Analysis date: October 25, 2023)
Fundamental Analysis
Amazon.com, Inc. (AMZN), a multinational technology company has a significant market presence and is listed on the NASDAQ exchange. The company's market capitalization stands at $1.23 trillion which demonstrates it as a key player on the global stage. The company's EPS stands at 1.26 and the PE ratio is 94.78 which indicates that investors are willing to pay a high price for the promising return and growth of this company.
After a considerable fall of 5.58% on October 25, 2023, the last close price was noted at 121.39 USD. This indicates a bearish trend. The highest price in a year was marked at 145.86 USD. and the lowest at 81.43 USD. The price range indicates a volatile market with substantial alterations in the price over the past year.
The upcoming earnings announcement on October 26th, 2023 might impact the stock performance. Amazon is expected to announce its third-quarter results, and these financial reports can provide further insight relating to the firm's viability and prospective growth.
Technical Analysis
The technical indicators reflect mixed signals on Amazon's stock performance. The RSI of 42 indicates neither overbought nor oversold conditions - a neutral standpoint. However, the MACD, which is a trend-following momentum indicator, shows a negative value of -1.58 (3-month), suggesting a bearish market trend.
In terms of moving averages, Amazon's recent performance does not paint a positive picture. Currently, the stock price is below its 50-day moving average of 132.61, indicating a recent downtrend. Yet, it sustains above the 200-day moving average at 116.97 signifying an overall upward trend in the longer term. ATR at 3.23 implies high price volatility.
A key point to note is that currently, there is no specified support level, whereas resistance is pegged at 125.98. This implies potential difficulties for the stock to bounce back in price.
News Impact and Analyst Perspective
Recent news indicates mixed factors which could potentially affect the stock's performance. There are concerns over Amazon's workplace conditions with reports of widespread injuries among warehouse workers. Such negative press could potentially impact the company's reputation and stock performance.
On the other hand, in line with the technical indicators, the consensus among the analyst community leans towards buying. Out of 40 analysts, 37 recommend buying Amazon's stock, while only three advise holding, and none suggest selling. The consensus target estimate for Amazon is 166.41 USD, which is significantly higher than the current stock price of 121.39 USD. This indicates a potential upside of 37%.
Predictions
Based upon the above analyses, the prediction for the next trading day is a possibility of a small recovery, majorly influenced by the upcoming earnings report. If the earnings fall in line with or exceed expectations, the stock price might see an upswing.
Moving into the forthcoming week, given the negative news concerning workplace conditions and the recent downturn influenced by the broader tech sell-off, further turbulence cannot be ruled out. However, the positive long-term trend and the buy recommendation by analysts would possibly be influential in counteracting the negative influences.
Final Evaluation
In the long run, Amazon's overall fundamental and technical assessment points towards a bullish trend. Despite short-term volatility, Amazon's robust market presence, potential earnings growth and the positive consensus from analysts, indicate promising prospects. Therefore, considering the potential 37% upside towards the target estimate of 166.41 USD, Amazon.com, Inc. (AMZN) is evaluated as a 'Buy'. However, investors need to constantly monitor market conditions, upcoming earnings report, and news updates that could influence the stock's performance.
