Shopify falls as Jefferies downgrades on e-commerce slowdown

Commerce.com

05/01/2023 17:32

** U.S-listed shares of Shopify  SHOP.N  down 3.8% at $36.13
after Jefferies cuts to "hold" from "buy", saying with consensus
view that U.S. will enter a recession it believes e-commerce
group will face the most uncertainty
    ** While multi-year blue-sky view for SHOP is unchanged, GMV
(gross merchandise value) growth expected to face headwinds in
2023, Jefferies analyst Samad Samana writes in note
    ** Slowdown in e-commerce, combined with co's major ramp in
capex for its Shopify Fulfillment Network, to limit upside as
stock approaches his $40 PT, Samana says
    ** E-commerce coverage universe has more small business
exposure and higher percentage of variable revenue, Samana says,
adding he sees the group regaining favor late in 2023, or 2024
as macro backdrop stabilizes
    ** Meanwhile, Amazon.com  AMZN.O  shares last down 1.6% at
$83.76 amid overall market weakness on Thurs after CEO Andy
Jassy said job cuts will now exceed 18,000 roles as it contends
with likelihood of slower growth
    ** Avg rating among 46 analysts covering SHOP is "hold" and
median PT is $40, per Refinitiv
    ** In 2022, SHOP's U.S.-listed shares shed 75%, while AMZN's
stock fell 50%
 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))