Amazon Likely To Post Slower Cloud Growth And Margin Loss From Retail Business Slowdown, Analyst Says Ahead Of Q4 By Benzinga

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Amazon Likely To Post Slower Cloud Growth And Margin Loss From Retail Business Slowdown, Analyst Says Ahead Of Q4 © Reuters. Amazon Likely To Post Slower Cloud Growth And Margin Loss From Retail Business Slowdown, Analyst Says Ahead Of Q4   AMZN +0.04% Add to/Remove from a Portfolio Add to Watchlist Add Position

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Benzinga –

  • Raymond James analyst Aaron Kessler maintained Outperform on Amazon.Com Inc (NASDAQ: AMZN) ahead of Q4 results.
  • The analyst expects solid long-term eCommerce growth for Amazon, continued leadership in cloud and AWS with some NT risk to Street revenue estimates, high-margin advertising growth, and improving margins for core Retail.
  • Kessler expects Q4 muted retail growth given tough comps, macro slowdown (particularly in Europe), and FX headwinds.
  • Given the high margins inherent in its advertising business, slowing top-line growth for Retail implies significant losses.
  • On the Q3 call, management noted slowing AWS growth as customers looked to tighten costs and specific industries’ pulled back.
  • Additionally, Microsoft Corp’s (NASDAQ: MSFT) December quarter Azure Cloud growth indicated a slowdown. MSFT also guided Azure for the March quarter to a slowdown.
  • Analyst’s checks pointed to continued ad momentum for Amazon in Q4.
  • Kessler believes workforce reductions could result in $4B plus reduced annualized operating expenses for Amazon.
  • The analyst sought more color around 2022 CapEx plans and expected continued fulfillment and transportation buildout moderation.
  • Kessler believes growth rates for AWS and potential margin improvements for Retail in 2023 will be the key focus for investors in the quarter.
  • The analyst estimates total sales of $147B, above the consensus of $145.6B and guidance of $140-148B.
  • Price Action: AMZN shares traded lower by 1.86% at $94.56 on the last check Wednesday.

Latest Ratings for AMZN

DateFirmActionFromTo
Mar 2022 Deutsche Bank Initiates Coverage On Buy
Feb 2022 Tigress Financial Maintains Buy
Feb 2022 Credit Suisse Maintains Outperform

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Amazon Likely To Post Slower Cloud Growth And Margin Loss From Retail Business Slowdown, Analyst Says Ahead Of Q4  

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