Shares of Amazon.com Inc. slipped 0.2% in premarket trade Tuesday, bucking a strong rally in the broader market, after Raymond James downgraded the ecommerce giant, citing concerns over valuation ahead of first-quarter results. Analyst Aaron Kessler cut his rating to market perform, after being at outperform the past 13 months. Kessler said with the stock near his previous price target of $925, he believed the shares were "fully valued," especially since investment levels are expected to remain elevated, earnings expectations appear aggressive and the belief price cuts and increasing competition will reduce the potential upside for Amazon's cloud business. "At current levels, we believe Amazon will need to begin to show greater operating leverage for shares to move meaningfully higher and reach our bull case," Kessler wrote in a note to clients. "Specifically, we would like to see improved margins/less losses for international, shipping costs, Prime Video." Amazon is scheduled to report results after Thursday's close. The stock has soared 21% year to date through Monday, while the S&P 500 has gained 6%.
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