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Why Analysts See Amazon Growing by 43.2% over the Next Five Years

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What drives analyst recommendations

Of the 46 analysts covering Amazon.com (AMZN), 40 have given it “buy” recommendations, six have given it “hold” recommendations, and none has given it a “sell” recommendation.

The analyst stock price target for Amazon is $876.51, with a median target estimate of $875.00, which means that Amazon is trading at a discount of nearly 13.3% to its median target.

Given Amazon’s impressive 2Q16 results, strategic initiatives to drive Prime membership growth, strong fundamentals, healthy guidance, and the staggering growth of Amazon Web Services, analysts expect Amazon’s earnings to rise at an average annual rate of 43.2% over the next five years.

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Moving averages

On July 29, Amazon’s last trading price was $758.81. The company’s stock was trading 2.3% above its 20-day moving average of $741.47. It was trading 4.7% above its 50-day moving average of $725.01 and 12.8% above its 100-day moving average of $672.80. 

MACD and RSI

A company’s MACD (moving average convergence divergence) is the difference between its short-term and long-term moving averages. Amazon’s 14-day MACD of 7.9 shows an upward trading trend, as the figure is positive.

Amazon’s 14-day RSI (relative strength index) is 66, which shows that the stock is somewhat overbought. Remember, an RSI figure of above 70 indicates that a stock has been overbought, whereas RSI figure of below 30 suggests that a stock has been oversold.

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