Amazon Earnings Are Next Week. It Remains ‘Best Idea’ for J.P. Morgan Analysts.

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J.P. Morgan

analysts are feeling bullish about

Amazon

with first-quarter earnings around the corner. 

Analyst Doug Anmuth wrote that Amazon (ticker: AMZN) remains its best idea in the internet sector in a Friday report. The macro environment is weighing on wallets, he explained, and first-quarter trends for e-commerce “remain muted,” with growth improving from the fourth quarter, but slowing throughout the period.

However, Anmuth believes Amazon and other e-commerce retailers will continue snapping up market share through untapped categories including grocery, apparel and accessories and furniture. He’s also confident Amazon can improve its operating margins in 2023 through strides in retail and believes the company “is taking meaningful steps to control costs.” 

Anmuth maintained his Overweight rating and $135 price target. Shares of Amazon rose 0.9% to $104.74 in early Friday trading. 

The company is set to report first-quarter earnings on Thursday, April 27 after the market closes. Analysts surveyed by FactSet have penciled in adjusted earnings of 23 cents per share on sales of $124.6 billion.

Investors will likely be paying close attention to the performance of Amazon Web Services, which Chief Executive Andy Jassy said “faces short-term headwinds right now as companies are being more cautious in spending given the challenging, current macroeconomic conditions,” in his annual shareholder letter published April 13.  

AWS is the largest contributor to Amazon’s annual operating profit. Earlier this month,

Piper Sandler

analyst Thomas Champion was upbeat about the cloud computing unit, noting its 50% market share and adding that it will perform even better in a challenging spending environment. He maintained an Overweight rating and $123 price target on the stock.

Write to Emily Dattilo at emily.dattilo@dowjones.com