Analyst Note| Dan Romanoff |
Wide-moat Amazon reported solid fourth-quarter results but provided a first-quarter outlook that was shy of our expectations. E-commerce was generally solid while Amazon Web Services continues to decelerate, including through January. We see real progress being made on the operational side, which was masked by impairment charges. We still foresee healthy long-term growth driven by e-commerce proliferation, AWS, and advertising, but the near term remains a work in progress with macro issues weighing on 2023, albeit with improvement in 2024. We cut our estimates on the top and bottom lines for 2023 while leaving the rest of our estimates largely unchanged. In turn, we cut our fair value estimate to $137 per share from $150. Still, we see the shares as attractive.