From Financial Modeling Prep: 2024-10-07 14:32:00

Amazon.com (NASDAQ:AMZN) shares dropped 3% after Wells Fargo downgraded the company to Equal Weight, lowering the price target to $183. Analysts cited near-term pressures like continued investment in Project Kuiper and challenges in Fulfillment by Amazon (FBA) fees.

Operating income estimates for Amazon were adjusted downward by $5.4 billion, $4.5 billion, and $5.5 billion for 2025, 2026, and 2027. The analysts are cautious due to expected margin impacts in the fourth quarter and limited margin expansion in the first half of 2025.

Competition from Walmart’s fulfillment services and pricing could limit Amazon’s FBA fee growth. Wells Fargo estimates a potential $2 billion annual decline in FBA fee inflation. Merchant advertising growth is also expected to slow after reaching 6% of GMV in 2024.

Amazon’s ad revenue may face cost pressures from high-profile content rights, including anticipated NBA-related expenses in 2025. Wells Fargo remains cautious until visibility around Amazon’s margin expansion improves.



Read more at Financial Modeling Prep:: Wells Fargo Downgrades Amazon to Equal Weight, Sto…