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Nowak lowered 22/23 EBIT by ~15%/~2% as he now assumes higher diesel costs into 23. However, the analyst also sees many opportunities for AMZN to offset higher fuel costs and drive upside to our still above Street estimates.
“We estimate fuel makes up ~20% of AMZNs total annual shipping cost…or ~$.78/ fulfilled unit. Note that AMZNs fuel costs vary from carrier pass-through adjustments (often delayed by a few weeks) to higher diesel cost at the pump from AMZLs growing in-house logistics offering which we estimate will move 80%+ of AMZNs N. American fulfilled units in 2022,” Nowak wrote in a memo to clients.
Net-net, AMZN stock remains a Top Pick at Morgan Stanley (NYSE:MS) on expectations of revenue acceleration and margin expansion.
By Senad Karaahmetovic
