Here's how every major Wall Street analyst reacted to Amazon's third quarter earnings report

Published Fri, Oct 30 20208:31 AM EDTUpdated Fri, Oct 30 202011:14 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only). Amazon 's strong third-quarter earnings report spurred several Wall Street analysts to boost their price targets for the stock. In its report Thursday afternoon, the e-commerce giant easily topped Wall Street estimates for earnings and revenue in the third quarter, but guidance for high Covid-related costs during the fourth quarter gave some analysts pause. The stock was down nearly 4% in Friday morning trading to roughly $3,087 per share. The projected $4 billion of Covid costs in the fourth quarter put Amazon's operating income range below what Wall Street was expecting. However, Evercore ISI said that should not worry investors. "Given this impressive revenue strength, we raise our 2021 revenue estimates by 3% to $455bn. Ultimately, we'd argue that any OI guide related weakness should serve as a compelling buying opportunity," the firm said in a note. The firm has an outperform rating and a $3,700 price target for the stock. JPMorgan, which has an overweight rating on the stock, moved its price target to $4,100 from $4,050, saying that Amazon's executives may be too cautious on the guidance. "We think AMZN's Op Inc guide could prove conservative, & likely leaves some room given uncertainty around holiday spend, weather, the election, potential employee hazard pay/1x bonuses, & COVID-19," the bank said in a note. Outside of the core e-commerce and delivery business, analysts found optimism in other segments, including streaming video. Wells Fargo, which raised its price target to $4,100 per share from $3,900, said there were signs of an Amazon Prime "flywheel effect" paying off for the company. "Subscription services revenue accelerated 400 bps to +33% YoY, despite Prime Day (a sign-up driver, in our view) being delayed in most regions to 4Q. Prime member renewal rates improved YoY in 3Q. The number of Prime members who stream Prime Video grew by more than 80% YoY and international customers doubled their Prime Video viewing hours," the bank said in a note to clients. Here's what other analysts had to say about the results. Credit Suisse: Outperform, price target to $3,750 from $3,700 "As consumer behavior continues to demonstrate a lasting preference for purchasing online – particularly as behaviors learned during shelter-in-place become new habits – we can look forward to ongoing upward estimate revisions as well as a likely rerating as the stock shakes off tactical concerns around deceleration and multiple compression." Bank of America: Buy, $3,650 price target "3Q results continue to demonstrate the strong profitability potential in the model when revenues match investments with assets running at capacity. With COVID cases increasing, we like Amazon's 4Q setup with strong holiday volumes potentially driving margins well above guidance." Barclays: Overweight, price target to $3,660 from $3,530 "Overall trends are still heading north at AMZN, and despite fears of deceleration and 'peak e-commerce', AMZN isn't it seeing it yet (4Q obviously aided by the Prime-day shift)." Deutsche Bank: Buy, $4,050 price target "Although the company discussed expense savings during the year because of COVID-19, including marketing leverage in 2Q and 3Q, lower travel expenses, etc., we think once the pandemic ends, we could see higher margins unless AMZN decides to return it to consumers." Loop Capital Markets: Buy, $3,750 price target "While we were looking for a strong revenue momentum in in the quarter and the guidance, we thought margin outlook would be better. We do note however, that AMZN has materially exceeded the high-end of operating margin outlook for both quarters reported under COVID." Baird: Outperform, price target to $3,700 from $3,500 "We are also increasing our price target to $3,700 based on higher out-year estimates and increasing confidence in the sustainability of e-commerce share gains this year." Truist: Buy, price target to $3,650 from $3,600 "Solid outperformance in core retail, increased retention in Prime and robust unit growth, all attest to Amazon's accelerated pace of share gains of the consumer wallet amid the pandemic. We believe these gains will prove sticky post C-19, with aggressive infrastructure investments and product rollouts likely extending the company's lead further." Oppenheimer: Outperform, price target to $3,700 from $3,500 "Increasing target to $3,700 (was $3,500) and maintaining Outperform as 3Q results highlight accelerating secular shift to eCommerce along with stabilizing AWS revenue." RBC Capital Markets: Outperform, $3,800 price target "All in, Fundies were Strong — organic Rev growth of 36% Y/Y (vs. 41% in Q2) and Op Margins expanded 190 bps Y/Y to 6.4%. Key – if you adjust for Prime Day timing, Q3 Rev growth same as Q2 – impressive!' Goldman Sachs: Buy, $4,200 price target "We continue to believe that the long term steepening of Amazon's growth curve driven by the acceleration of consumer adoption of ecommerce ... and enterprise adoption in cloud computing ... are likely to drive share price outperformance well beyond the current crisis." Jefferies: Buy, $3,800 price target "Q3 beat and Q4 guide support AMZN being long-term COVID beneficiary." Needham: Buy, $3,700 price target "Prime membership renewal rates continue to improve and members are consuming more video each quarter (especially internationally), which we anticipate will drive lower churn going forward." Cowen: Outperform, price target to $4,150 from $4,000 "Amazon crushed 3Q earnings with revenue and Op Income 4% and 30% above consensus respectively driven by sustained pandemic related demand and elevated Prime member engagement. Online stores, AWS, subscription and advertising businesses all performed well contributing to the beat." Morgan Stanley: Overweight, $3,750 price target "Higher near-term (and expected '21) COVID costs and greater fulfillment deficiency held back the 3Q/4Q profit story we expected … but the long-term is unchanged." JMP: Market outperform, $4,075 price target "Coming out of 3Q, whereby revenue came in 3.6% above consensus and operating income 24% above the high-end of guidance, it is clear to us that demand for Amazon's products and services can continue at these elevated levels going forward." Canaccord Genuity: Buy, $3,800 price target "With consumer shopping behavior shifting online at an accelerating pace, structural competitive advantages around fulfillment and scale, and a reasonable ~1.7x multiple on eCommerce GMV driving most of our valuation, we still find AMZN shares very compelling and think much of this strength will persist beyond the current pandemic." Piper Sandler: Outperform, price target to $3,903 from $3,860 "With the pandemic still driving elevated demand, higher Prime member engagement, plus events like Prime Day and Holiday Dash, 4Q sets up for extraordinary results. There's much to applaud in these results but not much to pick at." UBS: Buy, $4,000 price target "Looking forward to '21, while a debate will remain on rate of growth as eCommerce runs into tough comps, we would focus investors on the LT scaled revenue & operating profit narrative that is emerging at AMZN." KeyBanc: Overweight, $3,500 price target "In 3Q, the rate of online grocery sales continued to accelerate as Amazon expanded the offering to include grocery pick-up available from all Whole Foods Market stores. The demand for online grocery has been pulled forward due to COVID-19, and we believe AMZN's investment in this space presents a share gain opportunity." D.A. Davidson: Buy, $3,800 price target "Management indicated it expected COVID-19 related expenses to ramp sequentially to $4B from approximately $3.5B (and versus $7.5B cumulatively). We are not surprised by the increase given the recent surges in confirmed cases in the U.S. and internationally. Further, we expect the related costs to remain elevated in 1H21." Guggenheim: Buy, $3,600 price target "Amazon continues to lead, and benefit from, robust e-commerce growth, and is also seeing margin benefits from higher retail volume (despite increased investment dollars, including an additional $4bn COVID-19 related spend in 4Q20E), and continued strong growth in high-margin areas such as AWS, subscriptions, advertising, and third-party sales." Telsey Advisory Group: Outperform, $4,000 price target "Amazon's 3Q20 results were impressive, reflecting market share gains from strong sales growth and better-than-anticipated profitability across all segments, despite higher COVID-19 operational costs." Bernstein: Outperform, price target to $3,700 from $3,400 "Forget the bogeys, consensus, momentum, and whatever else sways short-term price moves. At 10K ft., Amazon's 3Q performance was outstanding." Raymond James: Outperform, $3,500 price target "Amazon delivered strong 3Q results driven by core retail across Online Stores, 3P Seller Services, and robust Advertising revenue growth. GAAP operating income was also better than expected, driven by leverage on fulfillment costs with higher volumes." BMO Capital Markets: Outperform, $3,800 price target "No change to our thesis that AMZN can invest while growing margin over time, but with another $4B of COVID-19 costs coming in 4Q, it may take until 2Q21 before we see the full effect. We remain Outperform but prefer GOOGL among super mega caps." Mizuho: Buy, $4,050 price target "Operating income guidance for 4Q20 was $4.5bn at high-end vs consensus of $5.7bn. That said, we believe the headwinds are not structural, and we expect upside due to strength in Prime Day and Holiday Shopping." Correction: An earlier version misstated JPMorgan's previous price target for Amazon. It was $4,050 per share.

Jeff Bezos, founder of Amazon

Katherine Taylor | Reuters

(This story is for CNBC Pro subscribers only).

Amazon's strong third-quarter earnings report spurred several Wall Street analysts to boost their price targets for the stock.

In its report Thursday afternoon, the e-commerce giant easily topped Wall Street estimates for earnings and revenue in the third quarter, but guidance for high Covid-related costs during the fourth quarter gave some analysts pause. The stock was down nearly 4% in Friday morning trading to roughly $3,087 per share.