SunTrust's Peck Remains on Sidelines Ahead of Amazon (AMZN) Q3
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
SunTrust Robinson Humphrey analyst Robert Peck previewed Amazon.com's (NASDAQ: AMZN) Q3 results and bumped his price target to $850.00 (from $800.00). The firm maintained a Neutral rating.
Peck is expecting a strong, but in-line quarter. "Amazon guided to revenue of $31-$33.5B, which implies YoY growth of 22%-32%, vs Street at ~$32.7B, and relative to 31% growth in 2Q'16," he commented. "Top-line estimates appear reasonable, given the Prime flywheel is working, 3P is growing faster than 1P, and AWS adoption continues unabated. The operating income guide implies CSOI of ~$800M-$1.4B, vs the Street at ~$1.4B. We maintain our revenue estimate of $32.9B but raise our CSOI estimate modestly to $1.4B from $1.3B, which implies ~40 bps YoY margin expansion; our estimates are about in line with Street consensus."
While they continue to believe Amazon will benefit from the Prime flywheel, higher 3P adoption, and secular AWS growth. They remain Neutral on: 1) a lot of positive assumptions baked into Street expectations, 2) rising competition, which could impact revenue growth (~20% CAGR through 2020) and op margin expansion (~800 bps), 3) capital intensity is high, and 4) comps will remain tough in the near-term.
Shares of Amazon.com closed at $834.03 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- General Electric (GE) PT Lowered to $35 at UBS Following 4Q Report
- UPDATE: Wells Fargo Downgrades Verizon Communications (VZ) to Market Perform
- Credit Suisse Starts BioMarin Pharmaceutical Inc. (BMRN) at Outperform, Says Next Gen Disease Treaments Drive 2017 Bull Outlook
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Analyst PT Change
Related EntitiesSunTrust Robinson Humphrey, Robert Peck
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!