'E-commerce on fire': Here's what 4 analysts expect from Amazon's first-quarter results

Price target: $2,600

Rating: Buy

Canaccord Genuity analysts led by Maria Ripps expect revenue growth to land at the upper end of Amazon's guidance, soaring 22% year-over-year as the pandemic fuels historic demand. Investors should watch out for any jump in fulfillment costs in Amazon's marketplace business, the firm cautioned, as such increases could wipe gains made in Amazon's AWS segment.

The company's expansion of Whole Foods grocery delivery also shows promise, the analysts said. Better serving the consumer staples segment while bolstering headcount for its core delivery business suggests Amazon will leave the pandemic in an even stronger position.

"Over the long-term, we anticipate that the COVID-19 pandemic will accelerate existing e-commerce trends, benefiting platforms such as Amazon," the analysts added.

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Price target: $1,987

Rating: Sell

R5 took a decidedly less optimistic view toward the e-commerce giant in its preview, downgrading the company to "sell" from "buy" on uncertainty around coronavirus' long-term fallout. A combination of slowed growth and rising operating costs will overshadow any demand boom and leave Amazon with weakened performance through 2021, the firm's analysts said.

"While it is a very fluid situation, our research continues to point to a bigger and longer lasting impact of COVID-19 on the overall economic climate," the team led by Scott Mushkin wrote. "Even with some states beginning to slowly relax lockdowns, as well as some countries such as Germany, the road back to a vibrant U.S. and global economy appears long an arduous if Asia is any template."

The analysts admit that Amazon remains poised to gain value over time as physical retailers make way for online alternatives. Yet the stock's recent spike to record highs doesn't appropriately account for "dramatically worsening economic conditions and rising future uncertainty," R5 wrote.

Price target: $2,480

Rating: Buy

The team of analysts led by Justin Post projects "e-commerce on fire," but is withholding judgement on the company's profit and AWS performances. Amazon's change in category demand could bite into its first-quarter margin, Bank of America warned, and a deceleration in web revenue could bring a "disappointing 2Q profit outlook."

"Online retail demand is unprecedented, but it could be hard to show profit upside in this environment," the analysts wrote. "Given the unusual 1Q with a significant uptick in online demand, we expect retail revenue upside but gross margin pressure from the category mix shift, less third-party mix, as well as Amazon's own efforts to support sellers."

The bank also warned that several positive demand trends will be just as temporary as the negatives. Comments on Prime member additions, cost-cutting, and the duration of strong online demand could provide investors with new guidance on Amazon's post-pandemic plans.

Price target: $2,600

Rating: Outperform

Analysts at RBC expect revenue to land slightly higher than Wall Street's consensus on a combination of heightened demand and soaring usage for its cloud computing segment. The firm views Amazon as a "Rocket Ship" stock, and its dominance in the online retail sector stands to boost performance for as long as economic lockdowns remain in place.

"Industry datapoints clearly suggest that e-commerce has seen a surge in demand during the COVID crisis," the team led by Mark Mahaney wrote.

Investors will also want to home in on margin trends as the business' one-day shipping initiative continues to gain traction. Any sign of improved profitability could help the business curry favor on Wall Street as the coronavirus threat clouds over forward-looking guidance.

"We note that we are entering an increasingly uncertain macro environment and there could be potential second order recessionary headwinds on Amazon's Retail, AWS, and other businesses in H2 and into 2021," Mahaney said.