In a research note this morning, Jaffray analyst Erinn Murphy reiterated her Sell-equivalent rating on GoPro's (GPRO) shares and cut her estimates for the fourth quarter and beyond. The analyst told investors that this holiday season "has not gone as planned," and said her firm's weekly Amazon (AMZN) tracking indicated the average pricing basket for GoPro products has seen a sequential quarterly decline.

AMAZON TRACKER: Piper Jaffray's Murphy reiterated an Underweight rating on GoPro's shares and lowered her estimates for the fourth quarter and beyond, noting that the holiday season did not go as planned. Since the company issued fourth quarter guidance, the Karma drone was recalled and production halted, GoPro announced office closures and lays-offs last month, and on December 20 an 8-K was released announcing that the board had approved additional severance and other costs, she pointed out. Moreover, Murphy told investors that her firm's weekly Amazon tracking indicated the average pricing basket of GoPro products has seen a sequential quarterly decline from $282 in the third quarter to $265 in the fourth quarter. While the price point for the HERO5 Black has remained stable at $399, the HERO4 Black and Silver have declined 24% and 22% since the third quarter of 2016, she contended. Murphy was not surprised by the average price decline of the HERO4 products given the HERO5 release, but pointed out that she is worried that "HERO5 sell-throughs have not been up to plan," especially through key retailers like Target (TGT) and Best Buy (BBY). The analyst lowered her fourth quarter revenue estimate for GoPro to $515M from $546M, well below the consensus of $604M, and lowered her fiscal year 2017 sales estimate to $1.26B from $1.31B.

HIGH PROMOTIONAL ACTIVITY: Murphy also noted that her store checks uncovered promotional activity underway for both the company's HERO5 products and HERO4 Session, with Best Buy, Target and Dicks Sporting Goods (DKS) offering gift cards with purchase of those products. While the analyst acknowledged that the level of support GoPro is providing for these promotions is not clear, she pointed out that the company is likely contributing to a portion of the gift card promos through vendor allowances. Murphy also lowered her price target on GoPro's shares to $8 from $9.

PRICE ACTION: In morning trading, shares of GoPro has dropped 1.25% to $9.07.