Amazon's Ad Strategy For The Win - BofA Analyst Expects Margin Surge in 2024
Portfolio Pulse from Anusuya Lahiri
BofA analyst Justin Post maintains a Buy rating on Amazon (NASDAQ:AMZN) with a $168 price target, expecting ad revenue growth to significantly contribute to margin expansion in 2024. Amazon's ad strategies, including Prime Video ads and new ad partnerships, are anticipated to drive this growth. The analyst projects a 370 bps contribution to FY23 North America margins from ad revenues and sees potential for Amazon's retail margins to grow significantly. Amazon's deals with Pinterest, Meta, and Snap are also expected to enhance ad performance and revenues. The analyst forecasts FY23 revenue and EPS of $570.67 billion and $4.72, respectively.
January 03, 2024 | 7:51 pm
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POSITIVE IMPACT
BofA analyst Justin Post expects Amazon's ad revenue growth to significantly contribute to margin expansion in 2024, maintaining a Buy rating with a $168 price target.
The positive outlook on Amazon's advertising strategy and expected margin growth, along with the maintained Buy rating and price target, suggest a bullish sentiment that could lead to a short-term positive impact on AMZN's stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
The article references Netflix's commentary on ad subscriptions potentially monetizing better than ad-free ones, which may relate to Amazon's strategy with Prime Video.
While Netflix is mentioned as a comparative example for ad monetization, there is no direct impact on NFLX's stock from Amazon's ad strategy. Therefore, the short-term impact on NFLX is neutral.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30