Prudential maintains its sell rating on Amazon.com (AMZN).
Analyst Mark J. Rowan says Amazon continues to face mounting strategic problems. He says the company described growth in its U.S. books/music/video (B/M/V) category as "slight," which appears to confirm his concern that the company has saturated the online B/M/V market. He questions the high market value placed on a segment that has little, if any, growth.
Rowan says consumer electronics (C/E) appears to have picked up slack from slow B/M/V growth, but he is concerned that this contributes negatively to margins, and Amazon could lose more money as it grows. He maintains his sell rating and has a $9 target.