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The good times for Amazon may be over for now, according to Wells Fargo. Analyst Ken Gawrelski downgraded the e-commerce giant to equal weight from overweight. He also slashed his price target to $183 from $225, implying downside of nearly 2% from Friday’s close. Gawrelski noted that Amazon’s consistently better-than-expected growth has led analysts to repeatedly positively revise earnings estimates since the second quarter of last year. Since June 30, 2023, shares have soared 43%, outperforming a 29% S & P 500 gain. AMZN .SPX mountain 2023-06-30 AMZN vs SPX since June 30, 2023 Going forward, that may not be the case. In June 2023, “we saw Amazon on the cusp of significant positive inflections in both key business lines: AWS and North America Retail. These calls have played out,” the analyst said. Amazon Web Services is its cloud unit. “Amazon is likely still a solid margin expansion story over the long term,” he added. “But as Amazon management has said multiple times, margin expansion won’t be linear. We, and market consensus, likely became a bit exuberant in our extrapolation of margin expansion trends in 2023 and early ’24 to ‘25 and beyond forecasts.” Gawrelski also pointed to increasing competition from Walmart as a headwind. “While there were always smaller, independent providers of fulfillment services to Amazon merchants, Walmart’s entry into this market changes the competitive field,” he said. “In addition to cheaper fulfillment pricing than Amazon, Walmart can match Prime’s shipping speeds. Walmart has constructed a national ‘next generation’ fulfillment center network which provides next day or two-day shipping to 75% of the U.S. population. Plus, Walmart can leverage its network of retail locations to facilitate last mile fulfillment,” Gawrelski said. The downgrade puts Gawrelski in the minority among analysts covering Amazon. Sixty-three of 66 analysts have a buy or strong buy rating on the stock, and only three rate it as a hold, LSEG data shows. Amazon shares fell more than 1% in the premarket following the downgrade. Year to date, the stock is up more than 22%.