AmTech remains a seller of Amazon (AMZN) into the Q2 earnings report tomorrow (July 23rd, 5:00PM). AmTech believes AMZN’s valuation is too high in the face of an anemic US and International consumer base:
Our negative thesis has always been predicated on the fact that AMZN’s valuation was unjustified and unsustainable given the deterioration in consumer sentiment and discretionary spending in the U.S. , U.K. and Germany. We have even greater conviction in this thesis today than we did back in January: record gas and food prices, plummeting home equities and the constant reinforcement of a Doomsday economic scenario by the talking heads of the 24-hour news cycle have resulted in considerable belt-tightening by consumers. While AMZN has thus far shown remarkable resilience in the face of heavy cyclical headwinds, we believe it is a matter of when, not if, it succumbs.
AmTech reiterates SELL on Amazon (AMZN), target $65.
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