(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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV