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On Wednesday, Cantor Fitzgerald maintained its Overweight rating on Amazon.com Inc (NASDAQ:AMZN) but reduced its price target from $270.00 to $230.00. The firm’s analysts cited the impact of tariffs as a disruptive factor for Amazon but also noted potential benefits for the company. As a prominent player in the Broadline Retail industry with a market capitalization of $1.91 trillion and robust revenue growth of 11% over the last twelve months, Amazon continues to demonstrate its market dominance. They believe that Amazon could gain market share from physical retail as consumers look for channels that provide a wide selection and convenience during economic downturns.
The analysts highlighted that despite the current challenges, Amazon has unique advantages, such as improvements in retail efficiency, that could support its financial performance in the future. According to InvestingPro data, the company maintains a GOOD financial health score, with strong cash flows sufficiently covering interest payments. They emphasized that these factors could positively influence key performance indicators (KPIs) for the fiscal years 2025 and 2026, with analysts forecasting EPS of $6.42 for FY2025.
Cantor Fitzgerald’s revised price target is based on a multiple of 25 times their estimated earnings before interest and taxes (EBIT) for fiscal year 2026, which takes into account the potential slowdown in the macroeconomic environment. This valuation is near the two-year trough, suggesting a conservative approach to Amazon’s future earnings potential.
The analysts expressed confidence in the medium-term risk/reward balance for Amazon’s shares, indicating a belief that the stock could offer favorable returns despite the current headwinds. They pointed out that Amazon’s broad selection and ease of use are significant factors that could drive consumer spending towards the online retailer, even in a weaker macroeconomic climate.
In summary, while acknowledging the challenges posed by tariffs, Cantor Fitzgerald remains optimistic about Amazon’s ability to navigate through these issues and capitalize on its unique strengths to enhance its market position and financial metrics in the coming years. InvestingPro analysis suggests Amazon is currently undervalued, with 8 additional ProTips and a comprehensive Pro Research Report available for deeper insights into the company’s potential. The company’s next earnings report is scheduled for April 24, 2025, which could provide further clarity on its growth trajectory.
In other recent news, Amazon.com has seen its stock price target reduced by Citizens JMP to $240 from $285, while maintaining a Market Outperform rating. This adjustment comes as Amazon plans to deploy over 3,200 satellites for its Project Kuiper, aimed at providing global internet coverage. The company faces a critical deadline to have half of these satellites in orbit by July 2026 to retain its Federal Communications Commission clearance. Meanwhile, JMP Securities also lowered its price target for Amazon to $240, citing a more conservative valuation amid a changing economic landscape. The firm anticipates slower growth in e-commerce spending but recognizes the potential for Amazon Web Services and advertising to increase market share.
In other developments, the Magnificent Seven stocks, including Amazon, have experienced gains following the Trump administration’s decision to exempt certain electronics from tariffs. This move led to a rally, with Apple (NASDAQ:AAPL) seeing a notable increase after being upgraded by KeyBanc. Additionally, Binance and KuCoin are facing service disruptions due to an Amazon Web Services network interruption, highlighting the risks of centralized cloud infrastructure. These recent developments underscore the dynamic environment in which Amazon and other major companies operate.
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