Morgan Stanley Cautious on Amazon.com

Morgan Stanley has published a research report on Amazon.com AMZN commenting that the firm remains cautious on the stock. In the report, Morgan Stanley writes, "We remain cautious on Amazon.com shares as we believe revenue / unit volume is beginning to decelerate (ex-tsunami comps) as operating margin sits at the lowest level since Amazon.com first turned a sustained profit in CQ4:01. Over the past 10 years, 3P unit mix has grown from 17% to 39%; however, operating margins are at their lowest level since the company reached LTM profitability. Throughout the earlier days, 3P subsidized 1P, allowing Amazon.com to take market share:; today, while 3P still continues to support margin expansion, the size and growth of the 1P business muffles the accretive effects." Morgan Stanley maintains its Equal-weight rating on Amazon.com, which is currently trading down $0.83 from yesterday's $231.90 closing price.