Amazon stock target cut to $240 by Citizens JMP

On Monday, Citizens JMP adjusted its price target for Amazon.com (NASDAQ:AMZN) shares, reducing it to $240 from the previous $285. The firm has kept its Market Outperform rating on the stock. According to InvestingPro data, analyst targets currently range from $200 to $306, with a strong consensus buy rating. The revision comes amid news that Amazon, now valued at $1.96 trillion, is gearing up to deploy over 3,200 satellites into orbit. The ambitious project is part of the company’s plans to provide global internet coverage.

Citizens JMP’s analyst noted the critical timeline set for Amazon’s satellite launch. The company is required to have at least half of the planned satellites in orbit by July 2026. If Amazon fails to meet this deadline, it risks losing its Federal Communications Commission ( FCC (BME:FCC)) clearance for the project. InvestingPro analysis shows Amazon maintains a GREAT financial health score, with moderate debt levels and strong cash flows to support major initiatives like this.

The satellite initiative, known as Project Kuiper, is a significant undertaking for Amazon, which aims to enhance internet connectivity across the world. The project’s success is essential for maintaining the FCC’s approval, which is a regulatory milestone for the company.

The price target reduction reflects the challenges and regulatory compliance pressures associated with the satellite project. The analyst’s commentary underscores the importance of the timeline and the potential implications for Amazon if it does not adhere to the FCC’s conditions.

Amazon has not publicly responded to the revised price target or provided additional details on the progress of Project Kuiper. The company’s stock performance and investor sentiment may be influenced by its ability to execute the satellite launches within the stipulated timeframe.

In other recent news, Amazon reported a strong financial performance for 2024, with total revenue rising by 11% to $638 billion. The company’s North America revenue grew by 10%, while international revenue increased by 9%. Amazon Web Services (AWS) saw a notable 19% revenue increase, contributing significantly to the company’s growth. Additionally, Amazon’s operating income surged by 86%, resulting in an improved operating margin of 10.8%.

In terms of analyst activity, JMP Securities reduced Amazon’s stock price target from $285 to $240, citing a slower growth expectation due to a decline in e-commerce spending. Despite this, the firm maintained a Market Outperform rating, highlighting the company’s diversified business model. Piper Sandler also adjusted Amazon’s price target to $215, while keeping an Overweight rating, indicating confidence in the company’s future prospects.

Moreover, the CEO of Amazon, Andy Jassy, emphasized the company’s advancements in customer service and product offerings, including expansions in AWS and Prime Video. These developments showcase Amazon’s continued efforts to strengthen its market position across various sectors.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.