Nomura Maintains Bullish Stance on (AMZN) following Q3

October 26, 2012 8:37 AM EDT
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Price: $809.04 --0%

Rating Summary:
    46 Buy, 5 Hold, 1 Sell

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Today's Overall Ratings:
    Up: 13 | Down: 24 | New: 12
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Nomura Securities reiterated its Buy rating and $285 price target on (NASDAQ: AMZN) following Q3 results after the close.

Analyst Brian Nowak comments, "Amazon reported 3Q:12 revenue of $13.8bn, 2% below us ($14.1bn) and 1% below the Street ($13.9bn). The miss vs. us was driven by N. American EGM, which grew 39% (vs. us at 50%), driven by increasingly difficult absolute dollar compares and the growing mix of 3P in N. American EGM. AMZN's new fulfillment footprint continues driving shipping cost efficiencies and gross margin expansion (+180bp YoY vs. us at +146bp). But "fulfillment expense" savings are taking longer to come through in AMZN's results. We attribute this to the scale of AMZN's DC build (13 in 2010, 17 in 2011, and 19 in 2012) and the time it takes for AMZN to iron out inefficiencies in the new DCs. We remain above the Street's CSOI by 2% in 2013 and are still attracted to the long-term AMZN share-gaining story and margin expansion story. F12E/F13E EPS from $0.56/$1.96 to $0.03/$1.92."

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Shares of closed at $222.92 yesterday.

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