(Updated from 10:38 a.m. ET to include latest share prices, more analyst commentary.)
NEW YORK (TheStreet) -- Shares of Amazon.com (AMZN) fell Monday after Bank of America Merrill Lynch downgraded the stock to neutral, saying a "protracted" investment cycle may weigh heavier on the online mega-retailer's bottom line than expected.
The firm also expects competition from Google (GOOG), Apple (AAPL) and others in digital media to keep Amazon's valuation multiple in check, and said it thinks the consensus estimates for the second quarter and fiscal 2013 may be too high.
"This is not an 'Amazon trades at an unjustifiable P/E call' (CSOI [consolidated segment operating income] margins should rebound to 6-7% from ~2% today in our view, but maybe later than most think), but with the stock up 18% YTD and for the reasons cited above, we are downgrading to Neutral," said B of A, which has a $235 price target on the stock.
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