Amazon.com (AMZN) PT Raised to $315 at Nomura

April 17, 2013 7:54 AM EDT Send to a Friend
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Price: $335.59 +3.39%

Rating Summary:
    33 Buy, 10 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 10 | New: 7
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Nomura Securities analyst Aram Rubinson raised his price target on Buy-rated Amazon.com (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 Amazon.com click here. For more ratings news on Amazon.com click here.

Shares of Amazon.com closed at $272.34 yesterday.




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