R5 Capital Downgrades Amazon Stock (AMZN) to 'Sell' and Cuts Its Price Target

Siamak Masnavi
  • 27 Apr 2020

On Monday (April 27), according to CNBC, boutique research and consulting firm R5 Capital downgraded Amazon stock (NASDAQ: AMZN) to 'Sell' from 'Buy', thereby becoming the only Wall Street firm that has a 'Sell' rating on the stock.

The reason for R5 Capital's pessimism is that their analysts believe that Amazon's earnings will be lower due to lower revenue and higher operational costs due to COVID-19 pandemic.

R5 also cuts price target for Amazon stock from $2,408 per share to $1,987.

Their analysts wrote:

“It is important to note that our forecast still calls for growth, but not at the heady levels prior to COVID-19 and the resulting economic slowdown.

"It is also important to note that we still view Amazon as well positioned to gain share over time.

"With the stock, however, having appreciated meaningfully and reaching our $2,408 price target in the face of dramatically worsening current economic conditions and rising future uncertainty, we believe prudence dictates reducing exposure to the equity.

"Indeed, if we had a concern regarding our outlook it would be that we are still being overly optimistic.

According to data from Google Finance, Amazon stock is currently (as of 16:12 UTC on April 27) trading at $2,400.09, down -$10.14 (i.e. -0.42%).