amazon Amazon was downgraded from overweight to neutral by JP Morgan Chase overnight, and the company’s share price is feeling the effects this morning — down about 2.8 percent to 267.50.

JP Morgan’s Doug Anmuth lowered his price target to 300 from 330, saying that he expects Amazon to have a hard time growing its market share in e-commerce as quickly as in the past. He estimates that the company had captured 26% of the U.S. e-commerce market in 2012.

“We think further share gains are likely to come at a slower pace,” Anmuth wrote in his report, according to Investors Business Daily. However, he added, “We continue to believe that Amazon will gain share of overall e-commerce and become a more valuable company over time, but think the near-term risk/reward at current levels is more balanced given slower unit trends and what we believe will be moderating gross profit growth in 2012.”

On the bright side, he predicted that Amazon Web Services will become a bigger part of Amazon’s profit, rising from 12 percent of gross profit in 2012 to 17 percent in 2014.

PreviouslyInside Amazon Prime’s ‘explosive’ growth: 10 million members and profitable

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  • Greg

    It’s important to distinguish between gross profit and actual profit. Amazon does not release enough numbers to determine AWS profitability. The analyst mentioned assumed 100% gross profit margins in his analysis; none the cost of the AWS servers are included in his analysis, and his analysis does not mean AWS is profitable once the cost of servers is included. See for details.

  • Guest

    Interesting that the current P/E, which is insanely high, doesn’t even warrant a caution. Wall Street hasn’t learned a thing.

  • Henry Pickelton

    Hmmm… downgraded by a trading company that lost $6.2 billion dollars last year on their investments. I would say that means it is time to buy! It’s like the movie ‘Let it Ride’

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