Amazon cut from Focus List at Citi, but still a top pick
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Amazon (NASDAQ:AMZN) is not safe from softening consumer spending trends, Citi says.
The New York-based bank indicated that while it still believes in the eCommerce and cloud giant, the recent slide for shares and growing inflation concerns prompted some reflection.
âGiven macro uncertainty and lack of near-term catalysts, we are removing Amazon from Citiâs NAM Focus List,â a note released on Friday morning reads. 
The bankâs analyst Ronald Josey added that a weaker consumer in a more challenged macro environment could meaningfully impact earnings moving forward. Even Amazon (AMZN), he advised, will not be able to completely avoid the changing dynamics in consumer discretionary spending. 
Still, the Seattle-based behemoth remains a top pick for the internet sector and remains âBuyâ rated at the bank. Josey indicated that while the removal from a âFocus Listâ indicates some trepidation, it does not break the overall bullish thesis on the stock. Indeed, the troubled consumer could prove positive for Amazon (AMZN) in his view.
âWe believe Amazon remains relatively well positioned to reaccelerate retail growth in [the second half of 2022] and we view Julyâs Prime Day and the upcoming Back-to-School and Holiday shopping seasons as core catalysts, particularly as comps get significantly easier beginning in [the third quarter] on what we believe are modest expectations,â Josey wrote. âTo the extent other retailers pass on inflationary costs and fees to consumers via higher pricing, we believe Amazon is likely to follow to remain competitive on prices overall.â
As a result of these encouraging dynamics, Josey indicated the current post-plunge entry point is quite promising even if there might be short-term pain.
âWe believe much of the risk is priced in, particularly for longer-term investors,â he wrote to clients, reiterating a $4,100 price target for shares.
Shares of Amazon (AMZN) accelerated 1.78% to the upside 90 minutes prior to Friday's market open.
Read more on Amazonâs impact on major indices as of late.