Evercore ISI Sees Amazon, Meta Platforms EPS Risk
2022.07.25 17:38
Evercore ISI Sees Amazon (AMZN), Meta Platforms (META) EPS Risk – Budrigannews.com
An Evercore ISI analyst reiterated Outperform ratings on Amazon (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META) in a note to investors Monday.
On Meta, who will report earnings on July 27, the analyst stated: “Several weeks ago, we lowered our estimates for Meta (by 7%/9% respectively for FY23 Gross Revenue and Op Income) in conjunction with our Large Cap Preview here, driven by our more cautious outlook on the current macro environment. We view the Street’s current Q2 Revenue estimate (-0.5% Y/Y decline and 3.7% Q/Q growth) as having downside risk, given our intra-quarter channel checks and the recent results from SNAP and TWTR. In terms of Q3, we view the Street’s Revenue estimate (5% Q/Q) as also having downside risk, and we anticipate META management’s tone being highly cautious.”
The analyst added they are “looking for $28.9B in Revenue, at the mid-point of mgmt. guidance of $28-30B, in line with the Street. Our $8.7B Operating Income estimate is slightly ahead of the Street at $8.3B, implying 30% margin, and our $2.69 in GAAP EPS is 4% above the Street.”
Meanwhile, Amazon is set to report second-quarter results on July 28. The analyst has a $180 per share price target on Amazon shares and told investors they previously lowered estimates and their price target for Amazon as they saw “weakening macro datapoints and cautionary survey results on overall consumer sentiment.”
“Based on intra-quarter data points and our model sensitivity analysis, we believe AMZN’s Q2, and especially Q3 Street estimates look aggressive. The Street’s Q3:22 Revenue growth assumption (6.5% Q/Q) seems a tad high even after accounting for Prime Day impact, which we estimate to be approx $4-$5B (our note here), given the current macro backdrop with softening consumer demand for discretionary items,” wrote the analyst.
“For the June quarter, we expect $118B in Revenue, $1.9B in GAAP Operating Income and $0.12 in GAAP EPS. Our Revenue estimate is below consensus and below the mid-point of management’s guidance ($116-$121B). Our Q2 Operating Income estimate is also below the Street and a tad below the mid-point of guidance of ($1B)-$3B,” he added.
