Amazon stock: Oppenheimer sees upside, raises estimates on better trade outlook
Investing.com -- Oppenheimer lifted its price target for Amazon (NASDAQ:AMZN) to $250 from $215 in a note Friday, maintaining an Outperform rating on the stock based on improving trade conditions and stronger-than-expected margins.
"We are increasing margins on lower trade costs," the analysts wrote, keeping a largely unchanged revenue outlook.
The firm highlighted Amazon's continued outperformance in e-commerce relative to the broader retail sector.
'E-commerce continues to outperform vs. overall retail, with QTD non-store retailers +3.7% y/y vs. retail ex. Motor, Parts & Gas +2.7%,' the note said.
Oppenheimer also raised its gross margin estimates for Amazon's e-commerce segment by 562 basis points for fiscal year 2025 and 187 basis points for 2026, reaching 9.1% and 10.5%, respectively.
Consolidated EBIT margin estimates were also increased by 91 basis points in 2025 and 90 basis points in 2026, now forecast at 11.4% and 12.8%.
The analysts left AWS estimates unchanged but reiterated expectations for a gradual acceleration in the second half of the year 'as capacity becomes available.'
In addition, the firm pointed to an internal memo from CEO Andy Jassy outlining plans to leverage artificial intelligence to control long-term headcount growth.
Valuation assumptions include 9.5x 2026 estimated AWS revenue, 5.0x 2026 e-commerce gross profit, and 23x 2026 estimated EBIT.
With Amazon's improved margin profile and a favorable trade backdrop, Oppenheimer now sees the company's profitability closer to consensus expectations, supporting its upgraded target.
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