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Online Sales to Boost Amazon Q1 Earnings: ETFs to Buy

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Amazon (AMZN - Free Report) is set to release first-quarter 2019 results on Apr 30, after market close. Being a market leader in e-commerce, it is worth taking a look at the company’s fundamentals ahead of its results.

Amazon has gained 24.5% over the past three months, underperforming the industry’s average growth of 2.7%. Most of the gains came over the past month as AMZN shares jumped more than 50% from its March low and has overtaken Apple (AAPL - Free Report) in market capitalization. The solid trend is likely to continue given that the online behemoth has a reasonable chance of an earnings beat (read: ETFs to Gain on Amazon's Rally Amid Coronavirus Crisis).



Inside Our Methodology

Amazon has a Zacks Rank #3 (Hold) and an Earnings ESP of +4.07%. According to our surprise prediction methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The stock saw negative earnings estimate revision of 8 cents over the past 30 days for the to-be-reported quarter. The Zacks Consensus Estimate represents a substantial year-over-year decline of 10.6%. However, Amazon’s earnings surprise history is impressive, with a positive earnings surprise of 27.5%, on average, for the last four quarters. Additionally, the company is expected to report revenue growth of 23.35%. The stock has a top Growth Score of A and falls under a top-ranked Zacks industry (top 34%).

The Zacks Consensus Estimate for average target price is $2,467.93 with nearly 97% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings (see: all the Consumer Discretionary ETFs here).

Amazon.com, Inc. Price, Consensus and EPS Surprise

Amazon.com, Inc. Price, Consensus and EPS Surprise

Amazon.com, Inc. price-consensus-eps-surprise-chart | Amazon.com, Inc. Quote

What’s Hot

Ahead of its Q1 earnings, a slew of analysts has raised their target price on the stock, citing that Amazon’s online sales has been benefiting from the pandemic. Bloomberg stated that Amazon is the top-most, high-profile winner of the current environment. Goldman believes that the pandemic would “steepen the curve of Amazon’s long-term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its businesses (read: ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus).”

ETFs to Buy

Given this, ETFs with the highest allocation to this online behemoth will be in focus ahead of its earnings announcement. These funds are likely to gain if Amazon delivers an earnings beat. We have highlighted eight ETFs that have AMZN as the top firm in their portfolio:

Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) : It has a Zacks ETF Rank #3 with a Medium risk outlook. Amazon makes up for 33.5% in the fund’s basket.

Vanguard Consumer Discretionary ETF (VCR - Free Report) : This ETF has a Zacks ETF Rank #2 with a Medium risk outlook. Amazon has 28.4% allocation.

ProShares Online Retail ETF (ONLN - Free Report) : Amazon makes up for 27% in the fund’s basket.   

Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) : The fund carries a Zacks ETF Rank #2 with a Medium risk outlook. Amazon accounts for 24% share (read: ETF Areas to Gain From Plunging Oil Prices).

VanEck Vectors Retail ETF (RTH - Free Report) : The fund has a Zacks ETF Rank #3 with a Medium risk outlook. Amazon makes up for 22.7% of the assets.

iShares Evolved U.S. Discretionary Spending ETF (IEDI - Free Report) : Amazon makes up for 15.2% in the fund’s basket.

iShares U.S. Consumer Services ETF (IYC - Free Report) : It carries a Zacks ETF Rank #3 with a Medium risk outlook. Here, AMZN takes 10.3% share.

iShares Global Consumer Discretionary ETF (RXI - Free Report) : AMZN accounts for 10.2% share in the basket.

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