logo-loader
viewAmazon.com, Inc.

Amazon should split retail and web segments to avoid anti-trust scrutiny, says Citi Research

Analyst Mark May said a smaller market cap may draw attention away from the e-commerce giant

Amazon packages on a shelf
Citi Research reiterated a Buy rating on Amazon’s shares

Amazon.com Inc’s (NASDAQ:AMZN) share price has found itself at the mercy of US President Donald Trump’s tweets in the past. Trump has called for greater taxes on the company, saying that the e-commerce giant has been using the US Postal Service as its “delivery boy” and that the Washington Post, owned by Amazon CEO Jeff Bezos, has covered the Trump administration unfairly since Amazon lost a case involving internet sales taxes.

Citi Research analysts expressed concerns about the company facing anti-trust regulations, suggesting that Amazon split its retail and web services divisions to escape rising regulatory pressure.

READ: FAANG Report: Amazon under fire over bribery claims; Google admits changing phone settings remotely

"There has been greater noise of late regarding the desire to investigate and potentially regulate the company," said analyst Mark May said in a note shared by CNBC.

"A smaller market cap Amazon retail business may bring (slightly) less attention to its market size and dominance," he added.

If separated, its retail business would be valued at around US$400bn while it’s Amazon Web Services segment would be worth around US$600bn, according to May.

May listed several other reasons a split may be the way to go, including improving shareholder selection, avoiding conflicts of interest and planning for Bezos’ succession.

The analyst noted that the company’s recent trillion-dollar valuation milestone and Bezos’ status as the world’s richest person wasn’t exactly low-key.

Nevertheless, Citi Research reiterated a Buy rating with a price target of US$2,250, calling the e-commerce titan a top pick.

Shares of Amazon were down more than 2% to US$1,924.21 in Monday afternoon trading.

Quick facts: Amazon.com, Inc.

Price: 1739.49 USD

NASDAQ:AMZN
Market: NASDAQ
Market Cap: $862.43 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Stobart Group PLC reports ' strong strategic and operational first-half...

Stobart Group (LON:STOB) CEO Warwick Brady and CFO Lewis Girdwood highlight what they believe to be the 'significant growth potential' within its aviation division and in particular at London Southend airport. Passenger numbers at the airport increased by 41.8% to 1.2 million in the six...

2 days, 10 hours ago

2 min read