Shares of the world’s biggest e-tailer slid 7% on Friday, as investors digested disappointing results that came against tough year-ago comparisons, but some on Wall Street said an opportunity to buy the shares was knocking.
Even with Friday’s sharp decline Amazon.com AMZN, -6.78% stock is up 2.6% with more than half of the year gone and the holidays ahead. In 2020, the pandemic forced restrictions on movement for much of the world and kept many workers at home, driving a 76% gain in the stock.The sticking point for investors was a miss on sales and a prediction that slowing sales growth would continue, as shoppers returned to old brick-and-mortar habits and generally did something besides shop.
SIG Susquehanna analysts cut their price target from rom $5,500 to $5,000, but kept a positive rating on shares as lead analyst Shyam Patil said it was a “great time to buy,” Amazon shares. “If Amazon can keep its dominant position it should keep seeing growth from the long-term secular trend of e-commerce.”
“[W]e submit that what is more important is the ongoing ramp in CapEx as Amazon continues to purchase middle/last mile assets in preparation for the resumption of one-day Prime Delivery expansion and what should be the rollout of same day,” wrote analysts led by Stephen Ju.“We are hence buyers of Amazon shares on a potential pullback, in anticipation of what should be a period of faster consumer wallet share gains.
“The reopening of society didn’t pull people away from online shopping, with the e-commerce behemoth posting its third consecutive $100 billion quarter. That said, the reopening of brick-and-mortar puts a little pressure on Amazon as Walmart, Target, and other retailers have gotten aggressive in their buy online, pickup in-store offerings,” said Guru Hariharan, former Amazon manger and current CEO of CommerceIQ, an e-commerce automation company.
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