Baird cuts Amazon stock price target to $215, maintains Outperform

Published 09/04/2025, 13:18
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On Wednesday, Baird analyst Colin Sebastian adjusted the price target for Amazon.com (NASDAQ:AMZN) stock, lowering it to $215 from the previous $260, while maintaining an Outperform rating. Currently trading at $170.66, with a market capitalization of $1.81 trillion, Amazon remains a prominent player in the Broadline Retail industry. According to InvestingPro data, analyst targets for the stock range from $200 to $306, suggesting significant upside potential despite recent market volatility. Sebastian's analysis suggests that while tariffs are likely to have a modest effect on Amazon's marketplace top line and margins, the company's broad product selection and increasing focus on non-discretionary categories could mitigate some of the negative impacts. The company's robust financial health, evidenced by its "GOOD" overall rating from InvestingPro, supports this view. With revenue growth of 11% and EBITDA of $120.47 billion in the last twelve months, Amazon continues to demonstrate strong operational performance.

The analyst noted that tariffs might lead to higher prices for Amazon Web Services (AWS) infrastructure, and a broader macroeconomic slowdown could affect most areas of the enterprise. Despite these challenges, Sebastian believes that Amazon's diversified business, greater mix of services, and higher-margin revenue streams from AWS, third-party Marketplace, Advertising, and Prime subscriptions are likely to provide some resilience for the company's revenue and margins.

The revised 2025 revenue estimate for Amazon has been modestly lowered to $698 billion, marking a 9.5% year-over-year increase, down from the previous estimate of $705 billion. However, the operating income forecast remains unchanged at $76.4 billion, representing a 10.9% margin. Growth expectations for Amazon's Online Stores, AWS, and Advertising are now set at 5.6%, 16.9%, and 15.9%, respectively.

Sebastian's new price target of $215 reflects updated estimates and a contraction in sector multiples. The target is based on 2x 2026 estimated retail revenue, 7.5x 2026 estimated AWS revenue, 2x 2026 estimated services revenues, and 0.7x 2026 estimated Physical Stores revenue. Additionally, it includes a 12x 2026 estimated EV/EBITDA, which is consistent with comparable company multiples ranging from 6-20x. Currently trading at a P/E ratio of 30x, Amazon shows promising value characteristics according to InvestingPro analysis, which indicates the stock is undervalued relative to its Fair Value. Investors seeking deeper insights can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, covering Amazon and 1,400+ other top US stocks.

In other recent news, Amazon.com has been the focus of multiple analyst reports and company developments. Wolfe Research lowered its price target for Amazon from $270 to $200, maintaining an Outperform rating. The firm highlighted potential revenue and operating income impacts from tariffs but noted Amazon's market share potential and resilience in its advertising and cloud segments. BofA Securities also reduced Amazon's price target from $257 to $225, citing concerns over future tariffs affecting supply chains and costs, but maintained a Buy rating, indicating a positive long-term view.

Cantor Fitzgerald reaffirmed its Overweight rating on Amazon, pointing to strong growth in Amazon Web Services (AWS), which exceeded its target with a 25% year-over-year increase in 2024. AWS's growth is expected to continue, driven by demand and advancements in artificial intelligence. Additionally, Amazon launched a new AI model, Nova Sonic, aimed at enhancing voice interaction capabilities across various sectors. This model is integrated into Amazon Bedrock and has been praised for its accuracy and cost-efficiency.

These developments reflect Amazon's ongoing efforts to navigate tariff challenges while continuing to innovate in technology and expand its cloud computing services. The company remains focused on leveraging its diverse business segments to maintain growth and market presence.

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

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