By Sam Boughedda
A Mizuho Securities analyst cut the price target on Amazon (NASDAQ:AMZN) shares from $198 to $155 on Thursday, maintaining the firm's Buy rating on the stock.
He explained that recent investor calls on advertising and cloud computing indicate downside to consensus estimates, while advertising checks show a continued mix shift to offline/services.
"Although 2Q22 revenue growth appears in-line, we believe consensus revenue growth rates ex-AWS in 2H22 (14%) and FY23 (15%) appear aggressive," said the analyst. "FY23 consensus cloud revenue growth at 26% appears at risk, as our CIO survey shows that spending growth could slow by 9 points on a shallow recession scenario. We lower our FY24 EBITDA by 27% to $102bn, about 10% below consensus."
He added that despite an attractive valuation, they believe the stock lacks short-term catalysts due to a likely downward revision cycle.
Amazon shares are down over 26% in 2022 but climbed 1.6% during Thursday's session.
"While the valuation is attractive, and we remain constructive on Amazon longer-term, we believe the stock lacks catalysts in the short-term due to a likely downward revision cycle. Amazon remains a Buy in our universe, as we see potential EBITDA upside in 2024 from products such as advertising, expanding Prime products, and AWS up-sells," wrote the analyst.