Amazon.com shares slump as costs weigh on outlook
Analysts with at least four brokerages, including BofA Merrill Lynch and J.P. Morgan Securities, lowered their price targets on Amazon's stock, as third-quarter results came in below market expectations.
The world's largest Internet retailer had launched its Kindle Fire tablet in September, which is likely to weigh on the fourth-quarter profit, Analyst Ken Sena of Evercore Partners said in a note to clients.
"Fulfillment spending was higher than expected as the company works to expand the number of fulfillment centers and adds selection," Sena added and cut the price target on the stock to $260 from $290.
The company has been spending on support growth, primarily to handle the growth of its main online retail business, and plans to build 17 new fulfillment centers this year.
"Amazon continues to invest in high-growth opportunities at the expense of near-term profits," brokerage Stifel Nicolaus said in a note, while cutting its rating on the stock to $265 from $280.
Shares of Amazon slumped to $197.91 in pre-market trading on Wednesday. They had closed at $227.15 on Tuesday on Nasdaq.
(Reporting by Arpita Mukherjee in Bangalore; Editing by Joyjeet Das)
