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JPMorgan bullish on Amazon, iPhone 14 demand to beat expectations, International Paper downgraded

Yahoo Finance Live anchors Brad Smith, Julie Hyman, and Brian Sozzi discuss JPMorgan analysts recommending investors buy Amazon amid weakness in FedEx, iPhone 14 demand being poised to beat expectations, and Jefferies downgrading International Paper stock to Underperform.

Video Transcript



BRAD SMITH: Welcome back, everyone. We're taking a look at some of the calls of the day today. Let's start things off with AMZN, Amazon. JPMorgan is recommending investors buy Amazon on FedEx weakness, citing a competitive element between the Ecommerce giant and shipping company, after FedEx withdrew its 2023 guidance here.

And FedEx, particularly what they had seen is global volumes decline, macroeconomic trends significantly worsen later in the quarter. Coincidentally, here, JPMorgan saying Amazon's seller conference ongoing for two days. Heavily focusing on new features for Buy with Prime. And that Prime delivery has really been where Amazon leans into and sort of the ability to deliver almost in real time after somebody makes an order.

And they typically do see more frequency of orders, more tickets, or a higher ticket from some of the Amazon Prime subscribers. And it's really just gonna come down to the logistical element and how they're able to take on either more just in time delivery options or just that last mile really going to be leaned on at least in this point in time.

But JPMorgan seem a little bit more-- a little bit more bullish-- I was trying to come up with a good pun-- on Amazon.

BRIAN SOZZI: Maybe this morning from FedEx is really the first time where the market starts to take seriously the efforts they are doing on the logistics front, at least as it pertains to FedEx and UPS and their operations. Now, this is a company over the past year that has invested billions of dollars in trucks, manufacturing capacity. It is very clear-- and airplanes, I should say.

It is very clear that Amazon wants to control its own future from the logistics front so it can try to bring down its costs. So it's investing today to bring down those costs over time. And it may be coming at the expense of FedEx.

BRAD SMITH: Yeah, several positive comments around the consumer spending through those two weeks of conference here, is what JP Morgan is noting. And for that last mile, they've certainly been investing, as you mentioned, billions of dollars to ensure that they can get Prime packages or just regular packages over out to those consumers.

BRIAN SOZZI: As for me, I'm watching Apple. The Call of the Day out of the folks Evercore ISI, Amit Daryanani. Looking-- well, I would say one of the latest notes on Apple post-new-iPhone launch, saying that demand looks strong.

Analysts saying, quote, "We think iPhones are poised to see a higher average selling price uplift versus expectations. In total demand is much stronger than expected." The analysts going on to note, into the launch, there was a lot of fear on how demand would look in China and other overseas economies. Of course, Europe in there as well. But all things look to be pointing to a strong start to these iPhones. The analyst over at Evercore reiterating an outperform in $185 price target on Apple.

JULIE HYMAN: But the stock is down.

BRIAN SOZZI: The stock is down.

JULIE HYMAN: Because tech is getting hit once again--

BRIAN SOZZI: Thank you, FedEx.

JULIE HYMAN: --today. More so than other companies. Thank you, FedEx. But thank you also like the vibe this week is just off, I think, overall because of-- not just FedEx, but all of those other companies that we talked about have been cutting forecasts.

Well, guess what? Thank you, FedEx, also for less demand for containerboard. Maybe thank you, Amazon, as well. Containerboard, indeed, is the focus of my Call of the Day. We're watching International Paper and also Packaging Corp of America. Jefferies downgrading both of those stocks to underperform, citing a massive inventory glut in containerboard.

At the same time, the company is on the hold for WestRock, which is in the same industry, saying that company is already depressed. The valuation is already depressed here. Containerboard demand, according to these analysts, is a proxy for the economy, which makes sense. And they've got cyclical end markets so they see sharp corrections in a downturn.

Orders for containerboard have softened over the last few months. Not surprising, the analysts say, because we've been seeing everywhere. As I said earlier in the show, if you're shipping less stuff, you need less containerboard--

BRIAN SOZZI: Containerboard

JULIE HYMAN: --to ship it in.

BRIAN SOZZI: Always a forward-looking unit here. I love this note. I'm glad you highlighted it.

JULIE HYMAN: Thank you. I like it as well. I mean, it's something that you don't think as much about. I should think about it because there is a box on my porch every damn day.

BRIAN SOZZI: What are you getting? Any big orders lately?

JULIE HYMAN: I mean, we're still doing a renovations so they're just things--

BRIAN SOZZI: [LAUGHS] Just coming at you?

JULIE HYMAN: --just show up. Lights, and switches, and I don't even know.