Market Opportunity - Amazon

• EVENT: AMAZON TO ANNOUNCE Q4 EARNINGS (February 2, Thursday): E-commerce giant Amazon is scheduled to report on Thursday after the market close. Analysts are looking for an EPS of $0.17 on revenue of $145.7 billion and company has a good chance of exceeding low profit expectations. Amazon stock has performed strongly in recent days after the stock managed to break above an important technical resistance around the $90 handle. As a result, shares are now up over 21% year-to-date (YTD).
• EARNINGS FORECASTS ARE TOO LOW: Consensus market view believe that Amazon will beat profit estimates for 4Q-22, the company expected to exceed earnings estimates because profit expectations are irrationally low. Amazon is expected to earn only $0.17 per share in the fourth quarter, implying an unreasonably large 88% YoY decline. However, if we look at Amazon's recent earnings results, particularly in the fourth quarter, we can see that E-commerce giant has consistently outperformed profit expectations over the last two years. In 4Q-21, Amazon outperformed profit expectations by 672%, with estimated profits of $0.18 per share compared to reported profits of $1.39 per share.
• AWS IS ON FOCUS: Investors are likely to focus on the AWS growth after Microsoft said it expects slowing Azure growth in the coming quarters. The cloud segment AWS which is rapidly growing, should not disappoint in the fourth quarter. AWS's third-quarter sales growth rate was 27% YoY, and 28% YoY in F/X-adjusted terms. AWS has exceptionally high profitability and margins. Moreover, Amazon is expanding its cloud infrastructure footprint to Asia and the Middle East, two highly dynamic markets with significant AWS potential.
• MACROECONOMIC OUTLOOK: The Federal Reserve begins a two-day meeting that is expected to end with the target range for Fed funds being raised by 25 basis points to 4.50-4.75%. That would represent the second time in successive meetings that the central bank has slowed the pace of its policy tightening in response to economic data that has taken turn for the worse in recent months.
• ANALYST OPINION PRICE EXPECTATIONS: CREDIT SUISSE forecasts 171$, BARCLAYS forecasts 125$, WELLS FARGO forecasts 155$ by the end of 2023.

• Calculations for exchange rate used as of 15:10 (GMT+1) 31/01/2023
• 1.00 lot is equivalent of 100 USD.

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