Amazon is about to look 'cheap': Analysts are doubling down on their bullish calls, even as the company's growth slows

Price target: $2,200 (cut from $2,400)

Rating: Overweight

"Why is Amazon Growth Slowing? In our view, these results and continued investment speak to how incremental e-commerce growth is becoming somewhat more difficult and expensive," analysts led by Brian Nowak told clients on Friday.

"The 2017/2018 tailwinds have lost some luster as we believe US Prime sub growth is slowing (now at 50%+ penetration), AMZN is already driving ~70% of every incremental dollar of growth within its core addressable US PCE,and AMZN’s international business hasn’t been able to grow as quickly as hoped – in particular beyond UK/Germany/Japan."

Price target: $1,850 (cut from $2,100)

Rating: Outperform

"The quarter was broadly fine, but guidance and commentary about increasing investment in '19 will likely weigh on the stock. Mgmt. mentioned that '18 was a 'lighter investment year' and we expect that '19 will ramp higher, particularly related to AWS, technology, and devices (but also potentially in fulfillment capabilities)," analysts led by Benjamin Schachter told clients on Friday.

"This is not necessarily a negative for the long term, but we think it will impact sentiment around the stock. We actually view the increased headcount and investment in AWS as a meaningful positive, as it indicates expected strength."

Price target: $2,000 (cut from $2,125)

Rating: Buy

"While AWS' [operating income] margin declined slightly m/m, it remains healthy (29%) and incremental margins remain >35%. Similarly, noise from various factors (Prime account change, device sales, Whole Foods comp) continues to cloud organic trends somewhat," analyst Mark May said in a Friday report.

May added: "All told, we find these results as generally in-line w/ our positive thesis, esp. following a noisier 3Q18 report."

Price target: $2,250 (cut from $2,300)

Rating: Outperform

"The market was disappointed with management commentary implying 2019 investment will increase relative to 2018 and this is understandable. But we think quantifiable context was lost in the commentary," analyst Daniel Salmon told clients in a Friday report.

He added: "Advertising remained strong, but below our elevated expectations; with that said, its faster-than-company growth remains a key support of long-term margin expansion."

Price target: $2,100

Rating: Outperform

"A key question posed by the 4Q18 results is the slowdown in unit growth as well as gross profit in its e-commerce segment (ex-WFM, advertising)," analysts led by Stephen Ju told clients on Friday.

"As we work through the math, we believe the combination of 1) no minimum free shipping campaign it ran during the Holidays which likely accounted for $700mm in foregone revenue, as well as 2) Prime revenue recognition change of ~$300mm, together accounted for ~7% of the roughly 13% of decel vs. 3Q18," Ju and his team added.

Price target: $1,975 (cut from $2,020)

Rating: Outperform

"While 4Q results were modestly ahead on weaker gross profit, we are slightly reducing '19/'20 revenues on slowing advertising, risk of new India regulations and overall slowing growth across ecommerce, offset by moderately higher AWS revenues," analysts led by Jason Helfstein wrote in a note on Friday.