The Ratings Game: ‘Pretty much Google 2.0’ — Amazon price targets reduced by analysts, though they say the long-term story is intact

by | Oct 28, 2022 | Stock Market

Analysts downgraded their price targets for Amazon.com after it reported missing its third quarter sales expectations alongside a weak sales forecast for the upcoming festive season. Amazon
AMZN,
-4.06%
stock tanked to lows of 20% in pre-market Friday trading to $88.98 per share after the company reported a 15% rise in overall sales to $127.1 billion in the third quarter versus Wall Street estimates of $128 billion.

The e-commerce giant also said it expects to report fourth quarter revenue between $140 billion and $148 billion, around $10 billion shy of analyst expectations. “We’re very optimistic about the holiday but we’re realistic that there are various factors weighing on people’s wallets,” said Amazon Chief Financial Officer Brian Olsavsky to analysts on a call on Thursday evening. “While we are encouraged by our progress across the business, macroeconomic environment remains challenging worldwide,” Olsavsky added. “The continuing impacts of broad-scale inflation, heightened fuel prices and rising energy costs have impacted our sales growth as consumers assess their purchasing power and organizations of all sizes evaluate their technology and advertising spend.” “The good news here is that the story isn’t broken, it’s just pushed out into 2023 while Q4 may get worse before it gets better… pretty much Google 2.0,” said Mark Shmulik, an analyst from Bernstein, who maintained an outperform rating of Amazon but cut the price target to $125 from $150 per share. Read: Alphabet is ‘a big ship to turn around,’ when it comes to much-needed belt-tightening, but Wall Street …

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