BofA Securities maintains Amazon stock Buy rating on Prime Day growth

BofA Securities reiterated its Buy rating and $248 price target on Amazon (AMZN) following an analysis of Prime Day, which generated an estimated $21.4 billion in Gross Merchandise Value (GMV), a 60% year-over-year increase. While the event's extension to four days led to a 20% decline in average daily sales, the strong overall GMV is projected to contribute 10.3% of Amazon's third-quarter GMV, up from 7.0% in 2024. This positive assessment aligns with other analyst upgrades, including Piper Sandler and Morgan Stanley raising their price targets, collectively reinforcing strong confidence in Amazon's continued growth trajectory.

Analysis

BofA Securities has reiterated its Buy rating and $248 price target on Amazon, citing robust Prime Day performance that generated an estimated $21.4 billion in Gross Merchandise Value (GMV), a 60% year-over-year increase. This growth was significantly influenced by the event's extension to four days from two in the prior year, a factor that also led to a 20% decline in average daily sales, suggesting a potential trade-off between headline growth and sales velocity. The event's composition showed stronger growth in higher-margin third-party sales (up 67% YoY) compared to first-party sales (up 55% YoY), a positive indicator for profitability. Prime Day is now projected to account for 10.3% of Amazon's total Q3 GMV, up from 7.0% in 2024, highlighting its increasing strategic importance. This bullish outlook is echoed across Wall Street, with Piper Sandler raising its price target to $250 on AWS strength and Morgan Stanley increasing its target to $300 based on favorable macro conditions. These positive financial developments and analyst sentiment currently overshadow a negative ruling from the British Columbia Labour Relations Board, which found Amazon engaged in an anti-union campaign, posing a potential ESG and operational risk.

Key Decisions for Investors

• The consensus bullish sentiment from BofA, Morgan Stanley, and Piper Sandler, backed by a 60% year-over-year increase in Prime Day GMV, supports a positive outlook, making the upcoming July 31 earnings a key catalyst to watch.
• Investors should scrutinize the upcoming quarterly report for margin impacts, as the impressive Prime Day GMV growth was achieved by doubling the event's duration, which led to a 20% decline in average daily sales and may signal increased promotional intensity.
• The adverse labor ruling in Canada presents a tangible ESG and operational risk that warrants monitoring, as any proliferation of anti-union findings across other key markets could lead to increased operating costs and reputational damage.