Retail giants Amazon and Walmart are launching their Black Friday sales early in response to a later-than-usual Thanksgiving. Amazon stock is off to a strong start for the week, as some analysts see a shorter holiday shopping window this year favoring the tech titan.
There are five fewer days than average for the traditional shopping window between Thanksgiving and Christmas this year, Wedbush Securities analyst Scott Devitt noted in a recent client note. That has retailers starting their deals earlier than usual. Amazon started offering Black Friday discounts on Nov. 21, eight days early. Walmart's Black Friday deals kicked off Monday.
The short shopping window for the holiday could help Amazon, Devitt wrote.
"Amazon is better positioned than it has ever been for the holiday season, in our view, following a significant buildup in fulfillment capacity over the past several years and the company's more recent shift to a regional fulfillment network which is reducing delivery times," Devitt said in a recent client note. "We anticipate that quicker delivery times will be a more important factor for consumers this year given a more compressed timeline for holiday shopping."
On the stock market today, Amazon stock is up 2% at 205.56. Shares have gained 4% so far this week.
E-Commerce Showing Healthy Trends
Online shopping is projected to grow faster than the broader retail market this the holiday season. The average market forecast estimates U.S. e-commerce spending will grow 8.5% this year, accelerating from 7.9% growth last year, according to a tally by Wedbush. Overall retail sales are expected to grow 3.6%, compared to 4.1% growth last year.
"Commentary from recent weeks suggests that while consumer demand is strong, consumers continue to look for discounts and remain relatively price sensitive," Devitt wrote in a client note Monday. "Generally, expectations for U.S. e-commerce growth this holiday season are healthy and point to slightly stronger trends, outpacing broader retail growth."
Devitt, meanwhile, rates Amazon stock as outperform, with a price target of 250.
Amazon Chief Financial Officer Brian Olsavsky said the company is "encouraged" by the start to the holiday during a call with analysts on Oct. 31. Amazon offered its first holiday discounts during its Prime Big Deal Days event in October, he noted.
Amazon is projecting that its fourth quarter sales will rise between 7% and 11% year-over-year, according to guidance it gave investors during its third quarter earnings results last month.
The midpoint of its range would represent $185 billion in sales. Analysts, however, are on average projecting Amazon will come in near the high point of its guidance at $187.3 billion, according to FactSet. That includes a projected $28.9 billion in sales from the Amazon Web Services cloud business. Analysts project Amazon's retail-oriented North America segment will grown 8.5% year-over-year to $114.5 billion in sales for the December quarter, according to FactSet.
Amazon Stock: Pullback From Record Highs
Amazon stock has gained 35% year-to-date. But shares have trended lower for the past week after reaching an all-time high of 215.90 on Nov. 14.
Amazon slumped last week with a 3% overall decline. That included a loss on Friday, when Amazon announced an additional $4 billion investment into AI startup Anthropic.
However, with gains early Tuesday and a 2% rise Monday, Amazon stock retook its 21-day moving average line, a signal it is regaining momentum.
Shares also moved ahead of a former 201.20 consolidation pattern buy point, according to IBD MarketSurge. Shares first broke out past that level on Nov. 6 as part of a broader rally following the election of Donald Trump to a second presidential term.
