Amazon (AMZN) is likely to face some tariff-driven demand destruction due to price elasticity, UBS said in a Tuesday note.

The analysts said Commerce Department data suggests that the goods Americans have acquired across various categories contain between 55% to 71% of imported content while food and beverage have about 22% of imported content.

When accounting for the possible impact of tariffs, the investment firm said it was reducing its estimates for 2025 revenue and EBIT, as well as for those in 2026 and 2027. The investment firm also said it expects Amazon to maintain its 2025 capital expenditure of $33 billion for the e-commerce business and $71 billion for Amazon Web Services.

UBS also lowered its global gross merchandise value growth forecast to 7.6% from 10.1% for 2025, and reduced it to 7.2% from 10.3% previously for 2026. The firm said it sees a general recovery to around 10.7% in 2027.

The online retailer is due to report Q1 results on Thursday.

UBS maintained its buy rating but cut its price target to $253 from $272 previously.

Price: 187.57, Change: -0.13, Percent Change: -0.07