- Mizuho analyst James Lee reiterated a Buy on Amazon.Com Inc AMZN with a $135 price target.
- Lee hosted an investor call on Amazon's advertising trends with a leading digital marketing platform.
- Based on tracking of a leading Amazon ad partner, ad spending growth per advertiser declined eight percentage points to -5% Y/Y growth.
- The typical lift in Q4 was much more shallow than in prior years at 10% Y/Y growth vs. 19% in the previous quarter.
- During the quarter, Lee noted that CPC trends for discretionary categories declined due to slowing economic growth.
- Staple categories also faced pressures as CPG advertisers are looking to reduce costs, with ad pricing growth for Beauty & Personal Care and Health & Household declining after holding stable for the past few quarters.
- The declining ad spending per advertiser and decelerating CPC trends in discretionary categories despite the second Prime Day reflected macro headwinds. It indicated a mix shift to services, tighter consumer budgets, and elevated staples inflation.
- Thus, Lee notes that the seasonal lift of ad spending is meaningfully less than in prior years, accounting for the impact of 3Q22's Prime Day.
- The analyst feels consensus e-commerce revenue reflects that in 4Q22, but FY23 seems optimistic at 8% Y/Y, compared to the analyst's estimate of 7%.
- The re-rating reflected a low penetration rate of e-commerce of >20%, positive long-term fundamentals but expected stock volatility from potential downward revisions near-term.
- Price Action: AMZN shares traded higher by 2.10% at $95.65 on the last check Friday.
AMZNAmazon.com Inc
$170.66-1.13%
Edge Rankings
Momentum
47.81
Growth
94.13
Quality
68.24
Value
50.36
Price Trend
Short
Medium
Long
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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