'Climbing the wall of worry in eCommerce': 3 Wall Street analysts react as Amazon's 4th-quarter earnings reveal Prime price hike

• Amazon stock soared 13% on Friday after its fourth-quarter earnings report offered encouraging guidance for 2022.
• The e-commerce giant highlighted the growth of its AWS cloud offering and said it would raise Prime prices.
• Here's how three Wall Street analysts reacted to Amazon's fourth-quarter earnings report.
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Amazon stock rose as much as 13% on Friday after the e-commerce giant reported mixed fourth-quarter earnings and guidance for the year ahead, though analysts focused on other key details.

The company said it would raise the price of its Prime membership for the first time since 2018, hiking the annual fee to $139 from $119. Additionally, gains from the company's stake in electric truck maker Rivian led to an outsized earnings per share beat.

Here were the key numbers:

Revenue: $137.4 billion, versus analyst estimates of $137.6 billion
Earnings per share: $27.75, versus analyst estimates of $3.57
AWS Revenue: $17.8 billion, versus the $16.1 billion in prior quarter

For the first quarter of 2022, Amazon said it expects revenue growth of as much as 8% to $117 billion, which is slightly below consensus estimates of $120.6 billion. Expected operating income of as much as $6 billion in the first quarter of 2022 is also below analyst estimates of about $9 billion.

Despite the mixed results and guidance, investors remain impressed by Amazon's dominance in the cloud with its AWS platform, as well as its pricing power evidenced by its hike of Prime subscription prices. Here's how three Wall Street analysts reacted to Amazon's fourth-quarter earnings report.

Goldman Sachs: "Climbing the wall of worry in e-commerce."

Goldman Sachs raised its price target to $4,200 from $4,100, and reiterated its "Buy" rating.

"In the coming years, we see a mixture of Amazon's prior period investments as an indicator that many investments toward next/same day delivery already commenced in the height of the pandemic in anticipation of forward growth. The collective yield from these investments, in our opinion, will only further cement Amazon's industry leadership position in eCommerce."

"We continue to see Amazon as a core long-term holding for Internet investors as the company has exposure to multiple long-term runways - online shopping, cloud computing, digital advertising, streaming media, AI driven computing etc. - that can sustain 15%+ growth while also producing margin expansion in the coming years," Goldman Sachs said.

JPMorgan: "Solid outlook as Amazon becomes cleaner & more compelling story through 2022."

JPMorgan raised its price target to $4,500 from $4,350, and reiterated its "Outperform" rating.

"We continue to expect revenue growth to re-accelerate beginning in 2Q as comps ease & Prime 1-day/same-day benefits increase, and we also believe AMZN's investments will slow following 2 heavy years, creating room for margin expansion," JPMorgan said.

Stifel: "AWS remains the world's largest, most dominant cloud business."

Stifel maintained its $4,400 price target and reiterated its "Buy" rating.

"Mister Market doesn't seem to realize that Amazon retail is trading 1P gross booked revenue for 3P net booked revenue + high-margin advertising ($30B run rate) while it exchanges inventory for logistics prowess. AWS remains the world's largest, most dominant cloud business growing +40% y/y on a $71B revenue run rate at 30% margin," Stifel said.