UBS lowers price target on Amazon amid tariff concerns

On April 29, 2025, UBS published a report regarding Amazon's stock ahead of its first-quarter earnings results. The report outlined that UBS is generally optimistic about Amazon's prospects, but has revised its first-quarter revenue estimates due to the impact of tariffs on consumer goods. Specifically, UBS analyst Stephen Ju reduced the price target for Amazon shares from $272 to $253, which still indicates a potential upside of 35.3% based on Monday's closing prices. Ju noted that at least 50% of the items sold on Amazon are now exposed to tariffs, which are expected to result in higher prices for consumers. The analyst warned of potential tariff-driven demand destruction, as rising prices may force consumers to make more difficult purchasing choices. Ju highlighted that consumers might reduce their spending on non-essential goods, which can affect overall sales on the e-commerce platform. Additionally, he pointed out that the tariffs could have second-order effects on exporters selling into the U.S. market. This situation may lead to decreased revenues for these exporters, which could result in cost-cutting measures, including layoffs, impacting employment levels worldwide and ultimately the volume of gross merchandise sold. Despite the challenges posed by tariffs, Ju remarked that larger companies like Amazon are in a better position to endure these impacts compared to smaller competitors. This resilience is crucial, especially with the e-commerce giant facing a 14.4% decline in its stock value year-to-date. As investors await the upcoming first-quarter earnings report, the market's reaction may hinge on how successfully Amazon can navigate these tariff-related challenges and maintain its growth trajectory amid a shifting economic landscape. Focusing on teriff impacts may cast uncertainties around consumer behavior and spending habits, which are vital for Amazon's future performance in the fluctuating market. Overall, while UBS remains bullish on Amazon's longer-term outlook, the immediate effect of tariffs necessitates cautious optimism as the company prepares to release its earnings results on Thursday, May 1, 2025. The outcomes of these earnings and potential future guidance will be critical in determining the stock's performance moving forward.