(AMZN) PT Raised to $315 at Nomura

April 17, 2013 7:54 AM EDT Send to a Friend
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Price: $533.16 -1.62%

Rating Summary:
    39 Buy, 8 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 18 | New: 41
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Nomura Securities analyst Aram Rubinson raised his price target on Buy-rated (NASDAQ: AMZN) from $300 to $315 ahead of Q1 results on April 25th. The firm adjusted their to reflect higher D&A and Fulfillment, offset by higher Revenue and GMs. "That should allow for Gross Profit dollar growth of +36% (was 31%). That is much closer to the AMZN’s trend of +40%. Investors should expect investments to re-ignite Revenue growth, but there may be a lag. We believe a target with modest upside is appropriate." The firm cut FY13E EPS from $1.73 to $1.67; FY14E EPS $3.96 to $3.44.

The firm sees four scenarios playing out for 2013:

Scenario 1: Margins Rise & Revenues Re-accelerate. This ideal situation would please investors all around, but it runs counter to the recent trade-off we have been witnessing between Revenue and GM. We view this scenario as unlikely.

Scenario 2: Margins Rise & Revenues Decelerate. This is a likely scenario that we think would leave investors only mildly satisfied since AMZN’s valuation demands a boundless, "blue sky" Revenue target.

Scenario 3: Margins Fade & Revenues Decelerate. This scenario would portray a customer that is unresponsive to Amazon’s investments. It may take time for investments to re-ignite the top line, but we do not think investments are likely to be entirely inelastic.

Scenario 4: Margins Fade & Revenues Re-accelerate. We view this as the most likely scenario. We suspect AMZN was not thrilled to see Revenue decelerate in 2012. The company also understands elasticity well, so we expect a stepped-up effort to be met with faster growth.

For an analyst ratings summary and ratings history on click here. For more ratings news on click here.

Shares of closed at $272.34 yesterday.

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