AmazonThe stock price closed down 7.56% on Friday at $3,327.59. The company's financial report released yesterday showed that its second-quarter revenue and third-quarter performance guidance were in miss the market expectation, and its target price was lowered by many investment banks. It was also fined a record 746 million euros (about 888 million US dollars) by the European Union for violating data privacy regulations.
The financial report shows that Amazon's revenue in the second quarter was US $113.08 billion, a year-on-year increase of 27.2%, the third consecutive quarter of more than US $100 billion, but miss the market expectation's revenue was US $115.2 billion. Looking forward to the third quarter, Amazon expects revenue to be between US $106 billion and US $112 billion, a year-on-year increase of 10%-16%, and miss the market expectation's revenue to US $119.2 billion.
After the financial report was released, a number of major Wall Street banks released research reports and lowered Amazon's target prices. Many analysts expected the company's short-term growth to slow down, but they were still optimistic about its long-term growth prospects.
UBSAnalyst Michael Lasser lowered his price target on Amazon to $4,020 from $4,350, but maintained a "buy" rating.
Amazon's second-quarter revenue fell short of expectations as consumers returned to stores, engaged in more leisure activities and reduced online spending, the analyst told investors in a research note. But Lasser added that Amazon still accounted for 44% of total new online spending in the quarter, much higher than the usual 36% share in the past five years.
Oppenheimer analyst Jason Helfstein lowered his price target on Amazon to $4,200 from $4,400 and maintained an "outperform" rating. Helfstein told investors in a research note that he expects Amazon's growth to slow in the second half of the year, but he remains bullish on the company's long-term growth prospects.
Credit SuisseAnalyst Stephen Ju lowered his price target on Amazon to $4,700 from $4,850 and maintained an "outperform" rating.
While most investors are focusing on third-quarter revenue guidance that is lower than market expectations, Ju believes that more importantly, as Amazon continues to build a "last mile" delivery system, it will expand Prime membership. In preparation for one-day delivery services, capital expenditures will continue to rise. However, Ju said he might buy when the stock pulls back.
Morgan StanleyAnalyst Brian Nowak lowered his price target on Amazon from $4,500 to $4,300 and still maintained an "overweight" rating.
In addition, media reports reported that Amazon was also fined a record 746 million euros by the EU for violating the EU General Data Protection Regulation (GDPR).
Amazon then responded that the fine was groundless. "There was no data breach and no user data was exposed to any third party."
It is reported that this is the largest fine so far since the EU GDPR rules came into effect in May 2018.