Anika Begay
(This is Vscek Pro’s live coverage of Friday’s analyst calls and Wall Street chatter. Refresh every 20-30 minutes to see the latest posts.) Major technology stocks and a major bank were among the stocks that were the talk of the town on Wall Street Friday. Analysts were reacting to Amazon’s latest quarterly report, which delivered mixed second-quarter results and disappointing guidance. Wells Fargo, meanwhile, downgraded Morgan Stanley. Check out the latest calls and chatter below. All times are ET. 5:44 a.m.: Analysts back Amazon after disappointing quarter, weak forecast Wall Street analysts are backing Amazon in the wake of a mixed quarter and disappointing guidance. Shares of the e-commerce giant fell nearly 9% in premarket trading after the company beat earnings estimates but fell short on revenue. Amazon also offered a disappointing forecast. AMZN 1D Mountain AMZN Falls But analysts are finding the bright spot in the company’s Amazon Web Services business, which posted 19% growth that beat expectations. That should boost market confidence in the segment’s “positioning (in the early GenAI ecosystem) and future growth,” Morgan Stanley’s Brian Nowak wrote. “AMZN remains a long-term buy for us,” Evercore ISI’s Mark Mahaney wrote. “Three fundamental catalysts continue to play out: AWS growth is accelerating substantially, the North American Retail segment is climbing to record operating margin levels, and the overall company is climbing to record FCF margins.” Evercore ISI’s Mahaney sees a potential scenario where AWS accelerates to 20% year-over-year growth, supported by Prime Video Ads gains during the second half. He reiterated his $225 price target, implying about 22% upside from Thursday’s close. Bernstein’s Mark Shmulik cut his price target by $5 to $210 a share, but encouraged investors to use the sell-off as an entry point. The results also suggest Amazon’s core business is posting “healthy” operating income and free cash flow growth. “Step away, Amazon is already living up to its potential,” he wrote. “Step in.” — Samantha Subin 5:44 a.m.: Wells Fargo Downgrades Morgan Stanley Wells Fargo is staying away from Morgan Stanley shares. Analyst Mike Mayo downgraded the bank from equal weight to underweight. His $95 price target, down from $99, implies a 6.6% downside over the next 12 months. Mayo cited concerns about Morgan Stanley’s wealth management business as the catalyst for the downgrade. He noted that the stock’s “industry-leading valuation appears to ignore the slowdown in growth in its higher-P/E businesses that has driven the historic revaluation.” Indeed, wealth management revenues rose just 2% in the second quarter compared to the same period a year earlier. “MS has the highest forward P/E of any large-cap bank, despite slowing wealth flows, downward pressure on [net interest income] and fee realizations, negative investment management flows, and accelerating insider selling,” Mayo added. “Additionally, MS does not appear to be benefiting from the recovery in capital markets as much as GS, but it trades at a significant valuation premium.” Morgan Stanley shares have gained more than 9% in 2024. MS YTD mountain MS year to date — Fred Imbert
