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Amazon (AMZN) currently holds an average brokerage recommendation (ABR) of 1.07, on a scale of 1 to 5, based on assessments from 46 brokerage firms. This rating translates to a favorable outlook, with 43 recommendations classified as Strong Buy and 3 as Buy, indicating that 93.5% of analysts support a buying position.
Despite the positive ABR, analysts warn that relying solely on these recommendations may not yield strong investment returns. Research shows that brokerage firms often exhibit a bias toward positive ratings, leading to a discrepancy between their recommendations and actual stock price behavior. In contrast, the Zacks Rank system, which is based on earnings estimate revisions, categorizes Amazon as a #1 (Strong Buy), further endorsing the stock’s potential for growth as the earnings consensus estimate has risen to $4.59 for the current year.
The difference in approach between ABR and Zacks Rank emphasizes the need for investors to use these tools in conjunction, rather than independently, to make informed decisions about Amazon’s stock potential.
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