Barclays has advised investors to stick with e-commerce winners ahead of the Q2 earnings season.
Along these lines, the brokerage firm highlighted Amazon.com Inc (NASDAQ:AMZN), MercadoLibre Inc (NASDAQ:MELI), and eBay Inc (NASDAQ:EBAY).
The financial services giant suggested in a note released on Thursday that these stocks are well-positioned to outperform irrespective of more unpredictable trends in the ecommerce industry.
Analysts at Barclays said that Amazon continues to be their preferred pick within both e-commerce and mega-cap tech sectors.
The firm expects Amazon's Q2 earnings to show significant growth in gross merchandise value (GMV) and market share gains across various regions on the back of rising Prime adoption and improvements in fulfillment and shipping efficiencies. Its recently launched discount store that pits Temu and Shein is also expected to contribute to GMV in the second half of the year.
Additionally, Amazon Web Services (AWS) is projected to see accelerated revenue growth due to increased demand for core cloud services and new AI training workloads, said Barclays.
Meanwhile, for Barclays, Latin America’s MercadoLibre remains a strong contender due to its market leadership in e-commerce and growing influence in fintech, despite some accounting and reporting changes and the impact of the Argentine peso devaluation.
It forecasted GMV of approximately $11.9 billion for Q2, reflecting a year-over-year growth of 13%, or 78% excluding foreign exchange impacts. Revenue for Q2 is expected to reach $4.71 billion, a 31% increase from the previous year, it said.
For eBay, Barclays expected improvement in 2024, with stable to accelerating GMV, expanding take rates, and margin growth. It noted that eBay's investments in focus categories and specific geographic regions are beginning to pay off, with GMV on the verge of turning positive for the first time in three years.
Barclays anticipated eBay to share details on its plans for the proceeds from the sale of its stake in Adevinta during the upcoming earnings call, which, it believes, could positively impact the stock.
However, Barclays remains cautious about the overall consumer demand and macroeconomic conditions. The trends in non-store retail data have been choppy, and there are pockets of weakness across various consumer categories, it noted.