Monday, February 6, 2023


Like most of us, you probably did some, if not all, of your holiday shopping online. Companies like Amazon (NASDAQ:AMZN) and Shopify (NASDAQ:SHOP) filled in some gaps or even handled most of your lists. However, new analyst reports say that e-commerce may be in for a rough ride in the months ahead.

Big hits came from all sides. Amazon took one from UBS (NYSE:UBS), which retracted its growth forecasts for Amazon and even dialed down margin projections on Amazon Web Services. The reason? The obvious, sadly: most people are about to take more hits to their discretionary spending levels. The only thing that kept regular people spending was credit cards. As of December 20, credit card debt in the U.S. hit a record high: $930 billion.

Nevertheless, it wasn’t all disaster for the e-commerce sector. The mood at the National Retail Federation show was considered optimistic, with some significant concerns in the background. Meanwhile, even analyst Josh Beck from KeyBanc offered a positive outlook on one e-commerce tool: Toast (NASDAQ:TOST). Beck called Toast a top pick, noting that even a difficult macroeconomic environment can be overcome by offering sufficient value.

Indeed, the e-commerce environment shows broad ranges of potential found throughout. Most regard Amazon as the flagship stock of e-commerce, and analysts call it a Strong Buy. However, analysts also call Toast a Strong Buy, despite being much less known. Meanwhile, Shopify is a Moderate Buy and offers the least upside potential. Its $41 average price target provides just 2.32% upside potential. Yet Amazon stock blows that out of the water; its $132.98 price target means 37.75% upside potential.

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