Goldman Cuts Amazon Target to $155, Flags 12% Growth and Margin Pressure
AMZN•Goldman Sachs trimmed Amazon’s price target to $155 and cut its 2026 revenue growth outlook to 12% year-over-year, highlighting an advertising slowdown and higher fulfillment expenses. The firm warned Amazon’s forward P/E multiple of 28x may be excessive given margin pressures and uneven operating leverage.
1. Goldman Revises 2026 Forecast
Goldman Sachs reduced its 2026 revenue growth estimate for Amazon from 15% to 12%, driven by weakening digital advertising demand and slower-than-expected AWS uptake. The bank also cut its full-year operating margin forecast by 80 basis points, pointing to rising fulfilment and labor costs.
2. Advertising Headwinds
Goldman highlighted that Amazon’s ad-reinvented business faces decelerating spend growth amid budget constraints at major brands. The firm predicts ad revenue growth to slow from 25% in 2025 to just 14% in 2026, undermining a key high-margin segment.
3. Fulfilment and Cost Pressures
With shipping and labor expenses rising 10% year-over-year, Goldman cautioned that margin expansion will be constrained through mid-2026. The bank warned that higher investment in logistics and healthcare fulfillment services will further compress profitability.
4. Valuation and Recommendation
At a forward P/E multiple of 28x versus the 5-year average of 24x, Goldman advised an underweight position pending clearer margin improvement. The firm set a revised price target of $155, reflecting a 10% downside from current levels.
