Merril Lynch Forecasts Strong 3Q Earnings For Amazon

Merrill Lynch's analyst John Post gives Amazon stocks a Buy rating

Amazon Inc. is the leading online retail giant in the United States. The company’s closest competitors are Alibaba and Wal-Mart that have been dominating the e-commerce market for many years. Wal-Mart was the top online retailer in the world but until the time when Amazon recently overtook it, all credits to Amazon Prime. Amazon is doing an excellent business and plans on to carry forward the same. It values its customers hence it launched and is now expanding the 1 hour and 2 hour delivery programs domestically and internationally.

Amazon is supposed to release its earnings for the third quarter in a couple of days. Justin Post who is an analyst at Merrill Lynch has strongly given its stock a Buy rating and expects that the company will hit $620 price target of its shares. Merrill Lynch’s analyst thoroughly previewed the performance of the company during the third quarter and has made appropriate predictions prior to the earnings release.

According to Mr. Justin Post, he believes that due to the mixed US retail market environment. The company can easily manage stable or accelerating sales growth as well as the unit growth. According to a source, “He also expects results and guidance to benefit from easy 4QFY15 media sales comparable, Amazon Web Services (AWS) sales momentum, Prime Day, and market share gains for the Electronics and Other General Merchandise (EGM) category driven by Prime.”

The Merrill Lynch analyst predicts that the company can easily post massive sales valued at $24.9 billion for the third quarter of the fiscal year. These numbers also meet the expectations that have been submitted by The Street. The unit growth of the company on a year over year basis will be 22 percent which are flat if compared to the previous quarter. Justin Post believes that company’s sales estimate for the Amazon Web Services will be valued at $2.08 billion whereas the sales of North American EGM segment will be valued at $11.3 billion.

However, his CSOI prediction is way more than that of The Street where it expects the company to post a massive $672 million. The company expects to post an Earnings per Share (EPS) of $0.84, according to John Post.