Stifel favors AMZN, CART, LIF stocks into Q4 earnings

On Monday, Stifel analysts conveyed their anticipation for the performance of e-Commerce & Subscription companies as they head into their fourth-quarter earnings. The firm’s analysis indicated that e-Commerce growth in the fourth quarter showed improvement over the third quarter and exceeded initial expectations, despite a shortened holiday season. Stifel’s note highlighted a shift in consumer spending, suggesting that the preference for goods over services, which had been a headwind for the e-commerce sector, appears to have reached its lowest point.

Stifel’s outlook for e-commerce in the upcoming year is cautiously optimistic, with the firm indicating that the sector might be poised for a slightly better performance. However, Stifel maintains a selective stance on e-commerce investments. Among the companies mentioned, Amazon (NASDAQ:AMZN) was given a ’Buy’ rating with a target price of $235.42. The analysts acknowledge potential risks to Amazon’s first-quarter guidance, particularly in relation to Third-Party Seller Services and GAAP Operating Income, but they believe these concerns are already widely recognized by the market.

Furthermore, Stifel expressed a preference for Cart.com (CART) with a ’Buy’ rating and a target price of $45.65. The firm’s favorable view of Cart.com is based on its focus on non-discretionary categories and the potential for continued growth in advertising revenue. Lastly, Stifel also recommends Life360 (LIF) with a ’Buy’ rating and a target price of $46.23, citing the company’s ongoing international expansion and the long-term advertising revenue prospects as key factors.

Stifel’s selective endorsement of these companies comes with a broader note of caution for the e-commerce sector, suggesting that while there are opportunities, they are accompanied by considerations that investors should be mindful of. The firm’s analysis and ratings reflect their current expectations for the market based on observed data trends and the strategic positioning of the highlighted companies. To make informed investment decisions in the e-commerce sector, investors can access detailed Pro Research Reports on InvestingPro, which transform complex Wall Street data into clear, actionable intelligence through intuitive visuals and expert analysis.

In other recent news, Match Group (NASDAQ:MTCH)’s credit outlook has been revised from positive to stable by S&P Global Ratings due to weak performance of its leading brand, Tinder. Tinder’s revenue grew by 3% in the nine months ending on September 30, 2024. However, the number of paying users has been dropping every quarter since September 30, 2022. Analysts from Jefferies downgraded Match Group from Buy to Hold and reduced the price target to $32 due to these challenges.

New Street Research also adjusted its stance on Match Group, shifting the rating from Buy to Neutral. The company’s shares are expected to find some support thanks to the initiation of a new 2% dividend yield and the continuation of share buybacks. However, the analyst highlighted the absence of consistent Monthly Active User (MAU) growth for Tinder.

Deutsche Bank (ETR:DBKGn) maintained a Buy rating on Match Group with a price target of $38.00. The firm’s analysis followed Match Group’s first investor day, which presented a three-year outlook featuring a strong AI-driven product innovation pipeline and a more optimistic margin forecast than anticipated.

Evercore ISI reduced the price target to $35 from the previous $37 while retaining an Outperform rating on the company’s stock. The revision followed Match Group’s first investor day, which took place on December 11, where the company presented varied projections for its various segments.

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