Amazon.com Inc (NASDAQ: AMZN) has a strong anchor in cloud and advertising, it’s the legacy retail business that needs to entertain the investors for the stock to recover, as per Rohit Kulkarni.
The bull case for the Amazon stock
The tech titan had its operating margin shrink to 3.2% in Q1 from 8.2% in the same quarter last year. This morning on CNBC’s “Worldwide Exchange”, the Internet Analyst at MKM Partners said:
Over the next 12 months, Amazon needs to grow its retail margins; expand to a level that could start showing signs of real sustainable profitability. That’s what Amazon investors are worried about right now.
Kulkarni is convinced Amazon will begin to improve its margins in the first quarter of 2023. The stock down 35% for the year currently trades at a PE multiple of 53.27.
Kulkarni is bullish on the new management
The MKM analyst also likes Amazon stock for the new management and sees upside to $180 a share. Last month, the American multinational named Doug Harrington as the CEO of its worldwide stores.
As we lab through the pandemic pull forward, inflation, and get new executives running full steam ahead, that’s the time to buy Amazon stock. If Harrington turns [retail] around and shows margins, that’s when you buy Amazon stock.
Under CEO Andy Jassy, who took over the helm last year, Amazon.com Inc has lost roughly $600 billion in market cap. The Nasdaq-listed firm is scheduled for its “Prime Day” – annual sales later this week.
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