The American eCommerce platform has had a rough start to 2022 as at the time of publication; its stock is down -$630.64 (-18.50%) year to date. AMZN’s market performance is below average, and recent developments are not encouraging, as both the medium and short-term outlooks appear bearish.
Amazon’s price fluctuated from $2707.04 to $3428.00 in the last month, and it is now trading close to the lower end of this zone and the bottom side of its 52-week range.
Notably, AMZN shares are trading below their 20-day, 50-day, and 200-day simple moving averages (SMA), which stock trading investors typically use to identify an uptrend or downtrend, which suggests bearish momentum for the meantime.
Prices have been decreasing sharply recently; it is prudent to avoid new long positions here as the movement has been a little too erratic to locate a solid entry and exit point.
Wall Street’s verdict
Amazon’s stock price was predicted for the next 12 months by 30 Wall Street analysts based on the company’s performance in the last three months. Estimates vary from a high price target of $4,700 to a low of $3,800, with the average price in the forecast predicted to climb by 49.45% from its current level of $2,777.45 to $4,150.83.
Based on the price estimates of the 30 TipRanks experts’ stock recommendations for AMZN over the past three months, all 30 say that investors should “Buy,” while none recommend that investors should “Hold” or “Sell.”
As a result of their recommendations, the average rating for Amazon stock is a “Strong Buy,” with a potential upside of 49.45% over the next 12 months and the lowest price target of $3,800 above the stock’s current price.
Tech stocks feeling downwards pressure
In light of the current bearish sentiments for the Nasdaq, which is lower than the level of market sentiment at the peak of the market crisis in March 2020, tech stocks have taken a beating.
When looking at the big tech stock price declines from their respective three-month highs, the world’s 5th most visited website has fallen the most from the group known as GAFAM, down 21.8% from its three month-high on November 18 as of January 24, and that number has only increased over the last few days.
The stock plunged 12% last week as a larger market sell-off weighed on technology equities, resulting in the company’s worst week since December 21, 2018, when the stock plunged 13.4%.
However, JPMorgan analyst Doug Anmuth has retained his price target for Amazon at $4,350; he cites factors such as a combined sales growth in its groceries, accessories, and furniture divisions, as well as a selected price increase in these categories.
In addition to a reduction in operational expenses, which will allow for an increase in marketing spending, he also noted a prospective price increase for Prime membership, which would result in an additional $3 billion in revenue for Amazon.
“Though our estimates come down, we believe lower expectations should help de-risk shares and AMZN will become a cleaner story to own through 2022,” Anmuth wrote in a research note.
Ultimately, Amazon is renowned for playing the long game, and the company’s recent downturn may be a good reason for investors to start considering its stock.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.