Why This Amazon Analyst Sees Risk To Short-Term Revenue Guidance

Amazon, Inc. AMZN shares had a lukewarm showing in the first half of the year, but have since picked up steam. Ahead of the e-commerce giant's quarterly report, due after the market close on July 29, an analyst at Bernstein raised the possibility of near-term pressure on revenues.

The Amazon Analyst: Analyst Mark Shmulik maintained an Outperform rating on Amazon shares and raised the price target from $4,000 to $4,200.

The Amazon Takeaways: There is potential for a greater B2B push by Amazon under new CEO Andy Jassy, Shmulik said in a note.

The retail giant is facing a tougher comparison against the pandemic year, which saw a boost from the restrictions in place, the analyst said. E-commerce sales are poised to for a slowdown, he added.

Data show that U.S. non-store sales saw 12% year-over-year growth in the second quarter compared to 28% in the first quarter, Shmulik noted. Similarly, growth in Europe slowed from 40% in the first quarter to 16% in the April-May period, the analyst said.

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Prime Day saw muted growth this year, at 8%, the analyst said, citing various sources. Additionally, soft macroeconomic conditions and credit data does not inspire much confidence regarding strong growth, he said. 

"In light of decelerating retail trends, 3Q consensus revenue estimates look high, calling for sequential growth despite the pull forward of Prime Day," Shmulik said. 

The analyst, therefore, sees risks to short-term revenue guidance.

Bernstein models revenues of $114.4 billion for the second quarter and $113.6 billion for the third quarter.

AMZN Price Action: At last check, Amazon shares were down 0.57% at $3,552.96. 

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