Amazon Stock: Why Analysts Expect Record Spending For Prime Day

Shoppers are expected to spend about $14 billion during Amazon‘s (AMZN) Prime Day shopping event later this week, according to estimates from Adobe Analytics. But Amazon stock was lower in Monday trading.

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The e-commerce giant’s 10th annual Prime Day will kick off July 16 and run through July 17. Amazon is promising its Prime members “millions of deals across more than 35 product categories,” as described in a blog post.

The discount shopping event is expected to drive $7.1 billion in U.S. spending on its first day and $6.9 billion on its second day, according to Adobe Analytics. The roughly $14 billion in spending would mark a 10.5% increase from the event last year.

It would also mark accelerated growth. Last year, Adobe estimates that Prime Day sales grew 6.1% year-over-year to $12.7 billion.

Prime Day Travel Deals On Analyst Radar

Adobe expects that stronger spending growth will be powered by steeper discounts, ranging from 9% to 22% off listed price for certain items.

BofA Securities analyst Justin Post expects that new types of savings on travel items, including 40% certain Carnival cruises, will contribute to year-over-year spending growth, he told clients in a note Monday.

BofA estimates that Prime Day will generate $13 billion in spending over the two days. But Post said the overall impact of Prime Day will be higher because of early days the retailer has been offering customers to promote the event.

Prime Day also provides a boost to Amazon’s advertising business, Post added. Post reiterated a buy rating for Amazon and a price target of 220.

“We estimate Amazon is still taking share within online retail, with Prime Day a likely driver of Prime branding and lower churn as customers get access to sizable discounts and rapid delivery,” he wrote.

Amazon Stock Fell Thursday, Friday

On the stock market today, Amazon stock fell .9% to close at 192.72. Amazon stock has gained 28% this year, compared to an 18% gain for the S&P 500.

Shares cleared a flat base buy point of 191.70 late in June, according to MarketSurge charts. Amazon’s breakout also helped it reach a new milestone: A $2 trillion market cap. It is just the fifth company to reach that mark.

However, shares slumped last week amid a broader sell-off for megacap tech stocks. Amazon stock lost 2.4% Thursday and a half-percent on Friday. Shares opened trading Monday hovering just above Amazon stock’s 21-day moving average.

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