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Amazon to stop accepting UK Visa credit cards, Roku shares sink after MoffettNathanson downgrade

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  • V
  • AMZN
  • ROKU

Yahoo Finance’s Julie Hyman and Brian Sozzi discuss Roku shares' fall as MoffettNathanson downgrades due to high revenue estimates and Amazon no longer accepting UK Visa credit cards starting in January.

Video Transcript

JULIE HYMAN: I want to move on to some of the other stocks that we were watching this morning, even as we see some of those electric vehicle stocks start to come down. Roku is another that we are watching. And this is one that also has been on a lot of Yahoo Finance user watch lists. The stock is down, though.

An influential company, analytics company, MoffettNathanson, is cutting the recommendation on the stock to sell from neutral. It's Michael Nathanson, longtime telecom analyst, who is cutting this and saying that, simply put, quote, "We think our and the Street's long-term revenue and earnings estimates are just too damn high," which is really an interesting situation here. He says this price target is $220 a share, Sozz.

BRIAN SOZZI: This makes sense. If you-- first of all, you look at Roku stock. Roku stock has essentially fallen off a cliff since August. And the trigger point for that was the company's latest earnings report. And we talked about it. Julie, I'm not surprised to see this downgrade. I suspect we will see a lot more downgrades on Roku in coming weeks off of this.

Company's had slowing growth in the third quarter, really across the board, also dealing with component shortages for its controllers here. You put all that together here, and you have the stock continue to be very richly valued. You have those estimates very juiced on the Street. It doesn't make a lot of sense to have those estimates. And I think the team over there is trying to get out in front of this.

JULIE HYMAN: Yeah, so we'll continue to watch that. And then one more maneuver or pair of movers, perhaps, that I want to mention, and that is Visa. Amazon is going to stop accepting Visa credit cards in the UK from next year on. And that's because Amazon is talking about the high fees that are charged for transactions. Really interesting here.

An Amazon spokesperson saying in an emailed statement to CNN, as a result of Visa's continued high cost of payments, we regret that amazon.co.uk will no longer accept UK-issued Visa credit cards as of the 19th of January next year. Why is this important, even though it's just happening in the UK? Well, first of all, Visa shares are getting hit on this. Second of all, does this presage a bigger battle, where Amazon is really flexing its muscles here and pushing folks towards its own various payment options?

Remember, Amazon, for example, just signed on with Venmo. They've just signed on with Affirm, as well as some additional payment options, which now, in retrospect, perhaps seem to be kind of a precursor to this announcement. So it's really an interesting one and one that we should continue to watch.

And just quickly before we go to break, I gotta mention some of the stocks we were talking about at the top of the show. The retail movers, now that they are open for trading, talking about Target, Lowe's, and TJX, of course, if we can show how those stocks are trading. And there you have it, Target still down about 4%. Lowe's and TJX-- look at TJX-- up 9 and 1/2%.