Stifel cuts Amazon stock price target to $245, maintains Buy rating

On Friday, Stifel analysts made a slight adjustment to the price target of Amazon.com (NASDAQ:AMZN) shares, reducing it from $248.00 to $245.00 while still maintaining a Buy rating on the stock. Currently trading at $190.20, Amazon commands a market capitalization of $2.02 trillion. The revision follows Amazon’s first-quarter results, which presented mixed financial indicators, according to the firm’s analysis. InvestingPro analysis suggests Amazon is currently undervalued, with additional insights available through their comprehensive Pro Research Report covering 1,400+ top stocks.

The report highlighted that although Amazon’s headline results for the first quarter appeared better, with overall revenue growth of 11% year-over-year, the performance of Amazon Web Services (AWS) was slightly below expectations. Additionally, North American margins seemed weak at first glance. However, Stifel analysts pointed out that when considering the removal of inventory pull-forwards, which were a response to anticipated tariffs, the margins would have surpassed Street estimates. This adjustment, they believe, also extends into the second quarter. According to InvestingPro, Amazon maintains a "GOOD" overall financial health score, with particularly strong marks in profitability and growth metrics.

Stifel’s commentary also touched on the impact of tariffs, suggesting that Amazon is relatively well-positioned due to its diverse product mix. The company’s portfolio ranges from essential items, which make up about one-third of units shipped, to higher-end offerings. The analysts noted Amazon’s status as a significant grocery retailer, even excluding Whole Foods and Amazon Fresh, and its expansion into various market segments with services like Amazon Haul and partnerships akin to Saks Fifth Avenue.

While AWS’s growth was noted as marginally light, Stifel’s forward-looking commentary remains positive. They highlighted that the capacity for AWS is being consumed as soon as it becomes available and that backlog growth accelerated by approximately 600 basis points.

In closing, Stifel reaffirmed their positive stance on Amazon, stating that only a slight revision to their forward estimates is necessary based on the current assessment. With analyst targets ranging from $195 to $287 and a strong consensus recommendation, the firm’s outlook on Amazon continues to be optimistic, despite the minor adjustment to the price target. For deeper insights into Amazon’s valuation and growth prospects, investors can access detailed metrics and analysis through InvestingPro’s comprehensive research platform.

In other recent news, Amazon reported strong financial results for the first quarter of 2025, exceeding Wall Street expectations with earnings per share of $1.59 compared to the forecasted $1.37. The company’s revenue also surpassed predictions, reaching $155.7 billion against an anticipated $155.29 billion. Amazon Web Services (AWS) remained a significant revenue driver, showing a 17% year-over-year increase. Despite these robust earnings, Amazon’s stock experienced a decline in after-hours trading. In related developments, BofA Securities raised Amazon’s price target to $230 while maintaining a Buy rating, noting the company’s potential for growth despite AWS facing competition from Microsoft (NASDAQ:MSFT)’s Azure. Morgan Stanley (NYSE:MS) also maintained an Overweight rating with a $250 price target, citing Amazon’s market share gains but expressing caution over potential costs from a new China tariff agreement. Meanwhile, HSBC adjusted its price target to $240 from $280, reaffirming a Buy rating and highlighting AWS’s critical role in Amazon’s valuation. These developments reflect ongoing confidence in Amazon’s strategic positioning despite economic uncertainties.

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