Amazon online retail segment could miss Q1 estimates, says Piper Jaffray
Piper Jaffray analyst Michael Olson says his firm's Amazon Search Index indicates Q1 online unit growth will be 21% year-over-year versus 23% in Q4, suggesting revenue that is slightly below Street expectations for the online retail segment. However, given the "strong cloud backdrop" and Piper's chief investment officer survey indicating an intent to accelerate spend, Amazon Web Services could partially offset any softness in retail, Olson tells investors in a pre-earnings research note. He also sees a high likelihood of "other" segment revenue upside in Q1 from advertising. Investors should own Amazon shares for the "plethora of topline tailwinds" and the potential for a return to margin expansion in the second half of 2018, Olson contends. He reiterates an Overweight rating on the shares with a $1,650 price target.