Amazon Likely For Margin Expansion From Moderating Shipping Cost Inefficiencies, Analyst Says Naming It Top Pick - Amazon.com (NASDAQ:AMZN)

Credit Suisse analyst Stephen Ju maintained Amazon.com Inc AMZN with an Outperform and raised the price target from $142 to $171.
The analyst previewed Amazon's 4Q22 results, likely for release on February 2.
The analyst modeled a conservative GMV growth recalibrated OpEx, and updated FX.
AMZN shares remain the analyst's top pick.
Ju reduced FY23/24 pro forma EPS estimates to $3.78/$5.69 (vs. $4.18/$6.16 prior).
The analyst remained concerned over how AMZN will drive OM expansion during a potential recession.
Ju believes it can drive the most efficiency over time in shipping costs.
The analyst believes 2023 will mark the moderation of Shipping Cost inefficiencies implying fewer miles driven per package and more packages per delivery run, which will show up in the form of slower Shipping Cost vs. GMV growth.
If Amazon reaches 2019, namely pre-Pandemic levels of efficiency, the potential operating profit dollar unlocks vs. the analyst's current published estimates for 2028 could be more than $15 billion.
From a modeling perspective, Ju lowered his global GMV growth estimates for 2023 and beyond.
The re-rating reflected the e-commerce segment operating margin expansion as it grew into its more extensive infrastructure, option for faster-than-expected FCF growth vis-à-vis its advertising segment, and upward bias to AWS revenue forecasts.
Price Action: AMZN shares traded lower by 1.42% at $100.47 on the last check Monday.