Here's Why Mizuho Is Bullish On Amazon; Maintains As Top Pick

Mizuho analyst James Lee says agency data support the ongoing challenging e-commerce environment.
His Amazon.com Inc AMZN advertising call with a "leading ad-tech platform" indicated that growth in daily adverting spend per advertiser decelerated by 32 points to 10% year-over-year in Q4 due to tough comps from Prime Day last year and headwinds of the supply chain, increased logistics costs, and rising labor/inventory costs.
The analyst views the Q1 revenue consensus estimate for Amazon.com as "aggressive," and his operating income estimate is 10% below consensus.
However, Lee expects headwinds to resolve in the second half of 2022 "as most of the incremental costs are short-term."
He would be a buyer of Amazon on weakness from any potential Street adjustments.
The analyst reduced his FY22 EBITDA estimate by 6% due to first-half concerns but maintained Amazon as a top pick with a Buy rating and $3,950 price target, suggesting an upside of 37%.
Price Action: AMZN shares traded lower by 1.83% at $2,838.00 in the premarket session on the last check Tuesday.

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