Piper Jaffray Said Weak Holiday eCommerce Data Supports Thesis of Slow '09 For Amazon (AMZN)
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Analysts at Piper Jaffray commented on Amazon.com (Nasdaq: AMZN) following comScore data which showed that total eCommerce sales declined 4% Y/Y QTD for Q4 and declined 37% Y/Y in the last full week of December. comScore said this was the first time they've seen negative growth rates for the holiday season since they began tracking e-commerce in 2001.
Piper Jaffray said, following the data, they are incrementally more confident that their thesis of a 10% decline in 2009 industry eCommerce sales and 10% growth in Amazon sales will in fact play out. Based on this view, Piper feels the Street estimates for 2009 revenue of $21.3B are too high, and is 6% above their $20.1B estimate.
For Q4, Piper still believes the company can meet the Street Q4 revenue estimate of $6.45B, but said margins for the quarter are at risks, given the discounting witnessed.
The firm reiterated their Neutral rating and $45 price target on Amazon.com. Shares of Amazon.com closed at $50.76 yesterday.
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