Investment bank Raymond James downgraded its rating on Amazon (AMZN) to Outperform from Strong Buy, Schwab Network reported today. According to the investment bank, Wall Street is “underestimating Amazon’s earnings pressures in 2025 and 2026.”

A customer entering an internet retail store, illustrating the convenience of online shopping.

Raymond James slashed its price target on AMZN to $195 from $275.

Amazon’s Negative Catalysts

The tech giant will be hurt by an “uneven macro environment, tariffs, and higher investments,” Raymond James warned. Moreover, AMZN has made “limited progress on monetization” and is facing “rising earnings risk,” according to the investment bank.

Amazon’s Strengths

Raymond James is still “constructive” on Amazon due to the firm’s “AI prospects and long-term investments,” Schwab reported. Among the areas in which Amazon is expected to invest are its supply chain and logistics.

More Information About AMZN

Analysts on average expect the company’s earnings per share to reach $6.25 this year and $7.51 in 2026 from $5.53 in 2024.

In the last month, AMZN retreated 12%, while the shares have sunk 22% in the last three months.

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Disclosure: The author owns shares of AMZN but has no intention of trading them in the next 48 hours. This article is originally published at Insider Monkey.