Amazon holds on to profits as MKM cuts estimates on worrying cloud, e-comm trends
Amazon (NASDAQ:AMZN) shares rose more than 1% in early Wednesday trading – albeit below session best – as investment firm MKM Partners lowered its estimate, citing concerns about the computing unit. cloud and e-commerce trends.
Analyst Rohit Kulkarni, who has a buy rating on Amazon (AMZN), now expects Amazon Web Services to grow 18% and 21% year-over-year in 2023 and 2024, down from previews. However, he expects “modest profit improvement” in the unit.
“For the year 2023/2024, we [revenue] estimated 1%/5% lower than Street and we are modeling op. Kulkarni wrote in a note to clients. demand levels and could lead to an above-trend band widening if the macro backdrop improves.”
In addition, Kulkarni also said retail margins in North America will “break even” in 2023, but international retail margins will continue to be in the negative single digits in 2023, with the potential for further reduced.
Kulkarni also lowered his price-per-share target to $125 from $145 along with an estimated cut.
Earlier this month, Morgan Stanley analyst Morgan Nowak gave an overall assessment of Alphabet’s optimism (GOOG) (GOOGLE) and Amazon (AMZN) but warns both companies may face lower profits due to higher costs.