Amazon Q3 results: analysts tipping a fall in earnings as online shopping boom fades
Amazon will post Q3 results this week, with analysts tipping a drop in profits on fading online shopping boom and supply chain bottlenecks.
Amazon earnings – what to expect
It’s tipped to be a relatively disappointing quarter for Amazon.com Inc (All Sessions), compared to the last year of results. According to numbers from Zack’s Investment Research published via NASDAQ.com, EPS ought to fall to $8.72, almost half of what they were in the previous two quarters, and down approximately 30% on annualised basis. Despite this, analysts are tipping fairly robust revenue growth across the business for the quarter, with sales remaining relatively strong, driven in large part by growth in the cloud services business. However, sales estimates have been downgraded recently by analysts, with the fall in EPS for the quarter attributable the re-shift in consumer behaviour away from online spending in the US, along with margin erosion due to the impacts of supply chain bottlenecks across the globe.
Amazon earnings – valuation, broker views and sentiment
Despite the expectation of weaker profits for Amazon this quarter and the risk of sustain headwinds in the future, the broker community remains very bullish on the company’s stock. Of the 52 brokers surveyed by Refinitiv, 50 hold either a “buy” or “strong buy” rating, while only 2 rate it a hold. Sentiment amongst IG’s client bases remains similarly bullish, with 97% of clients currently long, and only 3% short.
Amazon stock – technical analysis
Price action for Amazon shares is arguably reflecting the growing anxiety about the company’s profits and growth outlook. Though the long-term trend remains to the upside, price momentum is trending to the downwards, with the weekly RSI currently only just above the 50-level. Further to that, price is carving out a bearish descending triangle pattern right now, suggesting further downside to come if technical support at $3180 breaks. Such a move would open up a fall to key support around $3000 per share. On the other hand, a break out to the topside off this pattern would negate the bearish view on the stock, with resistance at $3560 the level to watch on the upside.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Introducing our best ever web platform
Enhance your CFD trading with the new IG Trading platform:
Quicker deals, with one-click execution from lists
Real-time updates, with news and Twitter feeds
Orders to part close, price change alerts, a dark theme and more
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.