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Financial institution of America minimize estimates on Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) to mirror increased macroeconomic uncertainty and the affect on earnings of a robust U.S. greenback.
Whereas BofA’s credit score and debit card knowledge confirmed U.S. on-line spending accelerated 20bps to +3.5% year-over-year in August, the acceleration on simpler comparables has lagged the agency’s expectations for extra explosive progress.
BofA’s reset on e-commerce: “A number of latest indicators recommend a weakening outlook for discretionary client spending together with; 1) increased than anticipated peak rates of interest from the Fed; 2) a detrimental fiscal 1Q pre-announcement from FedEx; 3) a pointy decline in CarMax gross sales on account of “affordability challenges” for customers and; 4) the primary MoM decline within the Case Shiller residence worth index since January 2019.”
The agency reiterated a Purchase ranking on Amazon (AMZN) and Impartial ranking on eBay (EBAY) amid the brand new macro backdrop that’s forecast to strain worldwide income for each e-commerce giants even with foreign money hedges in play. Amid a extra cautious view on This autumn and the primary half of 2023, the worth goal on AMZN was clipped to $157 from $170, whereas the PO on eBay (EBAY) was minimize to $44 from $54.
Decrease valuations broadly within the tech sector had been additionally an element within the worth goal drops by BofA on the 2 e-commerce shares.
Evaluate valuation metrics on AMZN and EBAY.
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