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JPMorgan analysts reiterated the Best Idea designation on Amazon (NASDAQ:AMZN) as they continue to see revenue acceleration, margin expansion, and capex moderation going forward.
These developments are likely to result in a “significant FCF inflection in 2023.” The analysts project Amazon could generate as much as $28 billion in 2023 FCF, back to pre-Covid levels.
“AMZN remains our favorite name by a wide margin. And while it may be a top pick of many and feel somewhat owned, we believe there is also growing caution across both Retail and AWS in our discussions,” they said in a client note.
While they acknowledge FX headwinds that will weigh on growth and profits, they also note that Amazon is “better hedged than some others, with product costs in the local currency and AWS Revenue mostly in USD.”
Uber (NYSE:UBER) is JPMorgan’s second favorite Internet stock as it expects to see “continued rides recovery & greater operating discipline to drive $1.5B in EBITDA this year, on track toward the company’s 2024 goals.”
Elsewhere, analysts also noted that Netflix (NASDAQ:NFLX) remains to be the most discussed Internet stock among investors amid “the upcoming advertising launch & a number of key questions still outstanding.”
