4 big analyst picks: Amazon efficiency enhancements are 'bearing fruit'

Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: upgrades at Amazon, Roblox, Marqeta, and Kornit Digital.

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Amazon racks up another buy rating after Q2 beat

PhillipCapital upgraded Amazon.com (NASDAQ:AMZN) to Buy from Neutral and raised its price target to $175.00 from $120.00.

Among other thigns, PhillipCapital predicts a possible renewed re-acceleration for Amazon Web Services (AWS) in the latter half of 2023, especially during Q4, "as Amazon rolls out its new AI services while customers gradually increase their spending on AWS." The analysts cited Amazon's observation that some customers are shifting from cost optimization "towards innovation and new workload deployments," a trend it expects to continue into the current quarter.

PhillipCapital also noted Amazon's expanded gross and operating margins stemming from "efficiency enhancements," including lower shipping and fulfillment costs amid easing inflation headwinds, as well as headcount reductions.

Earlier this month, Amazon was upgraded by Exane BNP Paribas and Rosenblatt as well, following its better-than-expected Q2 results and upbeat Q3 guidance.

Roblox earns 2 upgrades following Q2-triggered share slide

Roblox (NYSE:RBLX) shares rose more than 2% premarket today after receiving upgrades from two Wall Street firms.

Morgan Stanley upgraded the company to Equalweight from Underweight and raised its price target to $30.00 from $26.00.

While 2Q results were mixed, we believe that shares now fairly reflect the near term headwinds (e.g. 2H:23 bookings deceleration), balanced against the longer term opportunities to drive growth and operating leverage (e.g. AI tools and ads).

Meanwhile, Wedbush upgraded the company to Outperform from Neutral with a price target of $37.00.

The company fell short of Q2 estimates on Wednesday due to declining demand for its online games and increased competition. This resulted in more than a 22% drop in share price, wiping out almost all the gains made this year.

Marqeta upgraded following Q2 earnings and the Cash App deal

Berenberg upgraded Marqeta (NASDAQ:MQ) to Buy from Hold and raised its price target to $8.00 from $5.00 following the company’s Q2 report and the announcement of a four-year extension of its contract with Block (NYSE:SQ) to power its Cash App.

According to Berenberg, this has eliminated a significant uncertainty surrounding the company's shares.

While MQ’s near-term operating performance will reflect the economics of the Cash App renewal, which were (predictably) much reduced from what they had been in the prior deal given Block’s strong bargaining position, the company will now be able to establish a new baseline from which to grow during the next few years.

Shares closed with more than 11% gain yesterday following the announcements.

Kornit Digital upgraded at Morgan Stanley after a Q2 miss

Kornit Digital (NASDAQ:KRNT) shares gained more than 3% premarket today after Morgan Stanley upgraded the company to Overweight from Equalweight with a price target of $29.00.

Shares plunged more than 20% yesterday after the company’s reported Q2 revenues came in worse than expected.

According to Morgan Stanley, this reaction is overblown given a strong post-ITMA systems and upgrade pipeline that should return the company to revenue growth and EBITDA profitability in 2024.

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