CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We trim our 12-month target by $3 to $180, calculated using an EV/EBITDA multiple of 15x (was 17x) against our ’24 adj-EBITDA estimate of $132.3B (up from $115.0B) vs. 12x-30x historical average. We lift our ’23 EPS to $4.62 from $4.42 and ’24 EPS to $6.13 from $4.66. We begin ’25 at $7.28. Q3 GAAP operating income of $11.2B smashed the $7.7B estimate, as AWS margins hit 30.3% (+600 bps from Q2). Revenue of $143.1B (+13% Y/Y) smashed the $141.6B consensus. Yet, AWS growth was 12% Y/Y (flat from Q2), which was in line with consensus but will be viewed as a slight disappointment considering MSFT Azure’s reacceleration in the Sep-Q. AWS could still accelerate in Q4, as AMZN notes several new deals were signed in September with an October effective date. Our takeaway was that AWS deal volume will be lumpy Q/Q, especially since most companies are still in the idea generation phase of GenAI adoption. Q4 guidance was mixed, as a better-than-expected profit outlook was offset by a weaker-than-expected sales outlook.