Amazon Stock ( NASDAQ:AMZN )
In early trading on Wednesday, shares of Amazon ( NASDAQ:AMZN ) increased by more than 1%. However, they were off their best levels of the session. This was in response to an investment firm lowering its estimates for Amazon , citing concerns over its cloud computing unit and trends in e-commerce.
According to analyst Rohit Kulkarni, who has a buy recommendation on Amazon stock, Amazon Web Services is expected to expand between 18% and 21% year over year in 2023 and 2024. This forecast is a reduction from the analyst’s previous forecasts. However, he anticipates “moderate margin improvement” in the unit’s performance.
Kulkarni informed customers that his firm’s sales projections for 2023 and 2024 were 1% and 5% lower than those of Wall Street, respectively, while the firm’s projected operating margins were 3.6% and 5.1%, respectively, down from the Street’s 3.9% and 6.1% projections and 5.3% in 2021. “We are pleased by recent steps to reduce costs and personnel. These actions assist in aligning cost structures with current demand levels and may lead to above-trend margin improvement if the economic environment improves,” the company said.
Kulkarni also said that retail margins in North America would be “break-even” in 2023. However, overseas retail margins will continue to be low-single-digit negative in 2023, with the possibility for an additional decrease.
In connection with the reduction in estimates, Kulkarni also reduced his per-share price objective on Amazon stock, bringing it down from $145 to $125.
Morgan Stan...
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