UPDATE: Amazon.com (AMZN) PT Lowered to $3,450 at BMO Capital After Margin Expansion is Pushed Out

BMO Capital analyst Daniel Salmon lowered the price target on Amazon.com (NASDAQ: AMZN) to $3,450.00 (from $3,650.00) after the company guided 2Q22 net revenue: to $116-121B vs.$125.4B consensus. Operating income guidance was for $(1.0)-3.0B vs. $6.8B consensus. Harvesting fulfillment/logistics investment via OI margin expansion appears to be pushed out in the model again, as input/shipping cost inflation, and capacity/labor course correction is needed post COVID.

The analyst reiterated an Outperform rating, stating "we think normalized demand should improve capacity optimization through 2H22. 3Q22 revenue will benefit from easing comps and Prime Day falling in July and should be an especially important barometer in the face of continued macro uncertainty. In the meantime, AWS backlog is up 68% and supports continued upward revisions, which provides a little extra support to the thesis."

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