Vanguard, BlackRock, State Street Buy Amazon Stock

The Vanguard Group, State Street Global Advisors, and BlackRock Institutional Trust Company raised their holdings in Amazon (AMZN) stock in Q2 2019.

Maitali Ramkumar - Author

Sep. 16 2019, Updated 6:16 p.m. ET


The Vanguard Group, State Street Global Advisors, and BlackRock Institutional Trust Company raised their holdings in Amazon (AMZN) stock in the second quarter. Notably, seven of the top 10 holders in the stock have increased their stakes. Usually, rising institutional holdings implies a favorable opinion of a stock.

Reuters reported that Vanguard, which has the second-highest institutional holdings in Amazon, bought 0.39 million shares in the second quarter. Vanguard’s holdings in AMZN stood at 6.3% at the end of the second quarter.

Reuters data shows that BlackRock Institutional Trust raised its holdings in Amazon stock by over 0.1 million shares. Plus, State Street bought 0.03 million AMZN shares in the quarter.

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Further, Geode Capital Management bought 0.19 million shares of Amazon. Fidelity Management and Research Company, Baillie Gifford & Co., and Invesco Capital Management purchased relatively low quantities of shares. However, T. Rowe Price Associates sold 0.01 million Amazon shares in the second quarter.

CEO Jeff Bezos, the largest holder in Amazon stock, sold a massive amount of AMZN shares at the end of July. To learn more, please read Bezos Sells $1.8 Billion of Amazon Shares as Scrutiny Mounts.

Amazon stock: Performance

Amazon stock has recovered in September amid optimism on the US-China trade talks, rising 3.5%. AMZN’s second-quarter earnings fell short of Wall Street analysts’ estimate by about 6%.

Amazon’s peers Facebook (FB), Apple (AAPL), and Alphabet (GOOGL) (GOOG) have risen about 0.8%, 4.8%, and 4.2%, respectively. Apple’s third-quarter earnings fell but surpassed Wall Street’s forecast. Also, Facebook and Google exceeded their earnings estimate for the second quarter.

Further, Netflix (NFLX) and Disney (DIS) have risen 0.1% and 0.6% so far in the month. Disney stock had fallen sharply after its latest earnings report. Netflix also tumbled after its subscriber miss.

To learn more, please read Amazon Stock: Price Target, Valuation Compared to Peers.

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Earnings outlook

Forty-eight Wall Street analysts cover Amazon (AMZN). Of these, 47 analysts rated Amazon stock as a “buy” or “strong buy.” So, the vast majority of these analysts have a favorable opinion on the stock.

Analysts assigned a mean price target of $2,295 on Amazon stock, which implies a 25% upside from its current level. Amazon stock has risen 23% year-to-date.

Wall Street analysts forecast Amazon’s EPS to rise about 17% to $23.60 in 2019. Also, they expect its EPS growth to increase 41% and 47%, respectively, to $33.20 and $48.90 in 2020 and 2021. So, analysts expect the company to grow in the long term.

Amazon’s expanding transportation infrastructure contributes to its robust outlook, also resulting in higher transportation and distribution costs. Amazon factors these rising costs into its future guidance. The company forecasts its operating earnings to fall from $3.7 billion in Q3 2018 to $2.1 billion–$3.1 billion in Q3 2019.

Addressing the company’s rising transportation costs during its Q2 2019 earnings call on July 25, Amazon CFO Brian Olsavsky noted, “We expect we’ll be working through that for a number of quarters, but when the dust settles, we will regain our cost efficiency over time.”


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