One online retailer to rule them all.

Amazon.com (AMZN) could be responsible for close to a third of all U.S. e-commerce transactions, RBC Capital analyst Stephen Ju asserted in a research note this morning. Ju notes that Amazon’s reported revenues consist of a mix of gross revenues from its own businesses plus net third-party commissions. To date, he notes, Amazon has not given a breakdown of the two numbers, other than as a percentage of units shipped. The question, he says, is how much third-party gross merchandise value is flowing through Amazon’s platform–and what slice of all e-commerce Amazon is actually facilitating.

Read the rest of this post

Are things picking up at Nokia (NOK)?

Maybe… or at least, they seem to be getting worse at a decelerating rate.

RBC Capital’s Mark Sue this morning repeated his Outperform rating on the stock and lifted his price target to $16, from $12, asserting that the company’s operating margins in mobile device many have bottomed. He also contends the company will see some benefits in the first quarter from inventory restocking, lifting his unit forecast for the quarter to 90 million from 87 million. “It’s been the most volatile global handset quarter since we can remember, yet the shock to the system seems to be dissipating,” he writes. Sue still expects global units to be down 15 percent this year, but asserts that the rate of decline appears to be slowing.

Sue adds that “it’s bad out there, but not as bad as feared, implying the multiple [on NOK shares] may expand from trough levels.” He says the company is seeing “encouraging trends” in Asia, in particular in China and India, while Europe “seems to be stabilizing.”

Read the rest of this post

How bad is the market for cellphones? Really bad. Worse than really bad.

RBC Capital’s Mark Sue this morning cut his Q1 forecast for global handset unit demand to 230 million, from 248 million, which would mean a sequential drop of 25 percent. For the full year, Sue now expects handset units to drop 18 percent. “Despite some inventory clearing at carriers and distributors, magnified deterioration in developed markets and sharp declines in emerging markets means global handsets may contract more than dire predictions,” he writes in a research note.

Sue thinks that Nokia (NOK) “may feel the brunt of the weakness this quarter,” given that it will also likely lose some market share. He cut his unit forecast for Nokia for Q1 to 85 million units, down from 93 million; that would be off 25 percent from the 113 million the company reported in Q4.

Read the rest of this post

Adobe (ADBE) shares are trading lower this morning after RBC Capital analyst Robert Breza trimmed his estimates and price target on the stock, noting that the upgrade cycle for the recently released Creative Suite 4 has been slowed by the weak economy.

“Our current checks indicate that Adobe’s end markets of enterprises, knowledge workers, designers, OEM partners and developers remain under pressure worldwide,” he writes. “Customers remain reluctant to part with cash and engage in education programs to upgrade to the newly released CS4.” He adds that checks with distribution partners find “a tough business climate” in the company’s fiscal first quarter ending this month. He says that it looks like more customers will skip the new version of Creative Suite and wait for version 5, due in a year or so.

Read the rest of this post

Research In Motion (RIMM) shares are getting a lift today from RBC Capital analyst Mike Abramsky, who raised his rating on the stock to Outperform from Sector Perform. He upped his price target on the stock to $75, from $45.

Abramsky’s previous cautious view was based on worries over reduced margin visibility, execution issues and recession-related growth headwinds. But he notes that the stock has dropped 28 percent since it reported fiscal Q2 results. His new three-part thesis:

• Margin visibility is improving
• Execution is recovering
• Performance exceeding lowered expectations.

Abramsky notes that the company provided an unpleasant shock for investors late last year when it guided to a sharp drop in gross margins. But he says that with mix improving and costs coming down, hardware margins should stabilize. Meanwhile, he also says the company has addressed recent execution challenges, including product delays, quality issues and shortages.

Read the rest of this post

The Street is suddenly concerned about pressure on gross margins at Amazon.com (AMZN). The issue came up in two Street research notes this morning; while in the real world it takes three data points to declare a trend, I’ll settle for two.

RBC Capital’s Stephen Ju this morning repeated his Outperform rating on the stock, but cut his price target to $70, from $73, and trimmed EPS estimates. For 2009, he now sees $1.88, down from $1.94. He writes that “channel checks indicate broad-based gross margin compression across the e-commerce landscape, with aggressive price promotions used to drive traffic.” And that includes Amazon. Ju believes Amazon employed price promotions and coupons in particular for “more highly trafficked, in-season, head-of-the-curve items.” He also cut his Q4 estimate to 50 cents, from 55 cents.

Read the rest of this post

The Street continues to ratchet down its expectations for Google (GOOG) ahead of the company’s third-quarter earnings coming up next Thursday.

While continuing to recommend the stock, analysts at both RBC Capital and Bernstein Research today trimmed both their earnings estimates and price targets for the Internet search giant. That follows similar moves by analysts at Stifel, Morgan Stanley, AmTech and Collins Stewart.

RBC Capital’s Ross Sandler maintains an Outperform rating, but today cut his price target to $500 from $600. For 2008, his EPS estimate is now $19.14, down from $19.45; for 2009 he now sees $21.24, down from $23.46. The move, he writes, is “based on the deteriorating macro environment.” (I bet you sure are surprised to hear that.) He says search is holding up better than other forms of online advertising, but that “no company is immune to cyclical factors.”

Read the rest of this post

Apple (AAPL) shares are down sharply Monday morning after analysts at RBC Capital and Morgan Stanley cut their ratings on the stock.

RBC Capital’s Mike Abramsky cut his rating on the stock to Sector Perform from Outperform; his price target on the shares is now $140, down from $200. He cut his FY 2008 EPS estimate to $5.26, from $5.28; for 2009 he goes to $5.75 from $6.07; for FY 2010 he’s now at $7.38, down from $8.03. Abramsky says his new more cautious stance reflects “a worsening consumer spending environment.” He says a recent survey RBC conducted with research firm ChangeWave found a drop in the number of consumers intending to buy Macs: 29 percent intend to buy Mac laptops in the next 90 days, down from 34 percent in August, while 26 percent intend to buy a Mac desktop, down from 30 percent. Abramsky says that is the biggest decline in those measures in 2.5 years.

Read the rest of this post

RBC Capital got religion this morning on the slowdown in IT spending, cutting ratings on four stocks and slashing estimates and price targets on a host of others. The multiple moves boil down to this statement, which is repeated in most of the individual reports this morning: “We are taking a more conservative stance across our coverage universe to reflect a degrading environment for global IT spending.”

Read the rest of this post

Could Palm (PALM) post an upside surprise in its fiscal first quarter ended August?

RBC Capital’s Mike Abramsky raises that possibility in a research note this morning. Abramsky notes that in the company’s 10-K filed on Friday, Palm disclosed a Q4 backlog of $238 million, up from $185 million one year earlier, and $121 million two years earlier. He writes that past precedent finds Q1 revenues have been 1.6x-1.9x Q4 backlog. Use the lower number and you would get $413 million, or well above the current Street consensus of $324 million. Abramsky says that would imply a loss for the quarter of four cents a share, versus the Street’s estimate of a loss of 18 cents.

Read the rest of this post

Apple (AAPL) shares are getting a boost this morning from a flurry of bullish analyst commentary.

Last week, of course, the stock was under pressure from speculation about the health of CEO Steve Jobs. Today, the focus is back on the iPhone 3G, which was introduced a week ago at the company’s Worldwide Developers Conference.

RBC Capital’s Mike Abramsky wrote this morning that he expects “massive” shipments of iPhones in the company’s fiscal fourth quarter ending September. He expects the company to sell 5.1 million phones in the September quarter, and 6.5 million in the December quarter. Abramsky also says he expects rising Street iPhone estimates to boost investor sentiment.

Read the rest of this post