Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Markets & Finance

Citigroup Slaps a Sell Rating on Amazon

Analyst Mark Mahaney cites the online retailer's valuation and mounting competition

Citigroup downgraded (AMZN) to sell from hold on Jan. 2, noting the online retailer's profit margins and share price.

Higher spending on new technology has been doing a number on's profit in recent quarters. A 12% one-day jump in the shares on Oct. 24 reflected slightly better-than-expected third-quarter results, but also investor relief that Bezos plans to slow the growth of new tech spending (see BusinessWeek, 11/13/06, "Jeff Bezos' Risky Bet").

Now Amazon's stock price is up more than 50% since their late summer lows, in large part due to the belief that the company's operating margins have been on the path for a healthy rebound, Citigroup said Jan. 2.

But analyst Mark Mahaney is dubious. "We believe that Amazon's current valuation implies a level of operating margin expansion that is simply not attainable," Mahaney wrote in a research note. Mahaney noted challenges ranging from tough competition on pricing to rising online advertising costs.

Amazon's stock closed at $39.46 on the Nasdaq on Friday Dec. 29. The market was closed on Jan. 2 to observe the funeral for former President Gerald R. Ford. The stock had traded at a 52 week low of $25.76 on Aug. 11.

blog comments powered by Disqus