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(Bloomberg) – Amazon.com’s price target was lowered at Morgan Stanley, who wrote that the online retailer’s profits could be under pressure due to increased headcount and higher wages .
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The company lowered its target from $ 4,300 to $ 4,100, placing it below the average analyst target of $ 4,157. The new view still shows an increase of almost 20% from Amazon’s last close. Morgan Stanley, along with every other firm Bloomberg tracks, recommend buying the stock, although she wrote that the shares may be limited until income growth can re-accelerate in the first half of the year. next year.
Amazon stocks fell as much as 2.5% on Monday, pushing megacap tech and internet stocks down. Among other notable names, Apple Inc. fell 1% while Microsoft Corp. was down 1.1%. Facebook Inc. was down 0.7% and Alphabet Inc. was down 0.4%. The Nasdaq 100 index lost 0.7%, compared to the S&P 500 index which is trading flat. The group came under pressure when the 10-year Treasury yield rose, briefly topping 1.5%, the highest since June.
With the day’s decline, Amazon is down about 10% from the July high, although it remains more than 5% above the August low.
Earlier this month, Amazon said it was looking to hire 125,000 warehouse and shipping workers, a move that follows an earlier commitment to hire more than 40,000 people in corporate roles. and technology. He also said starting salaries for open logistics jobs would average $ 18 an hour, above the base of $ 15 an hour he set in 2018.
Amazon’s logistics workforce and rising wages “reveal more pressure on future profits,” wrote analyst Brian Nowak, who lowered his EBIT estimates for 2021 and 2022 in view of the impact of these issues. However, he wrote that even as the cost of labor rises, the company’s growing logistics workforce “is poised to enable more e-commerce share gains, faster delivery speeds. fast ”and new business opportunities.
(Updates trading and adds more technology names in the third paragraph.)
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