Even amid fear that the U.S. is going through a recession that can hit retailers, Amazon stays JPMorgan’s finest concept forward of its third quarter earnings outcomes, due Thursday. Since its final earnings report, Amazon inventory has shed roughly 28%, and JPMorgan has trimmed its estimates to account for forex headwinds given the robust U.S. greenback and slower discretionary spending. Nonetheless, the agency is bullish on Amazon — it has an chubby score and a $175 value goal on the corporate. “We stay assured AMZN can re-accelerate income development and develop OI margins into 2023, largely pushed by Retail enchancment and nonetheless stable AWS development,” wrote Doug Anmuth in a Wednesday notice. He acknowledged that Amazon could also be impacted by among the identical forces that hit Alphabet and Microsoft of their respective quarters. Microsoft reported an earnings beat however shares fell on a weak steerage, whereas Alphabet missed Wall Avenue expectations on the highest and backside traces. “MSFT Azure development slowdown within the December quarter is also mirrored at AWS, however we nonetheless anticipate Cloud spend to be resilient given secular shift & prioritization for corporates,” he mentioned. “GOOGL’s outcomes final night time can also increase considerations about heavy spending & headcount, however we consider AMZN is a pair quarters forward in rightsizing its value construction publish pandemic & subsequently nearer to benefiting from margin enchancment.” The large image Amazon is best positioned than its friends to resist an financial downturn as a result of its low costs, transport velocity and stock, in line with Anmuth. “Retail prime line concern is usually pushed by macro & how AMZN will maintain up in a recessionary atmosphere,” he mentioned. “Close to-term, we expect greater in-stock ranges and sooner supply speeds will likely be key drivers as Prime returns to regular, & we anticipate AMZN to have a listing benefit this vacation season as omni-channel retailers could also be extra constrained by bodily area, whereas AMZN additionally has the advantage of 3P sellers.” The corporate must also profit from decrease freight and gasoline prices relative to the primary half of the yr, in addition to additional rationalization of heavy pandemic spending. As well as, the corporate give attention to enhancing its retail margins will assist total. The corporate has a aim of returning retail margin ranges to what they noticed earlier than the coronavirus pandemic. “At Code final month, CEO Andy Jassy indicated that AMZN constructed out the logistics community in a pair years when it was anticipated to take 6-10 years,” Anmuth mentioned. “He additionally known as Retail a mid-single digit margin enterprise, which we expect displays extra of a goal margin.” Elsewhere, Anmuth is inspired by the cloud service AWS’s $100 billion backlog and sees stable development for the sector going ahead. The corporate can also be boosting its free money circulate to return to pre-pandemic ranges. — CNBC’s Michael Bloom contributed to this report.