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Amazon (AMZN) Shares Higher as Analyst Upgrades, Sets 'Street High' Target of $160


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November 6, 2009 2:30 PM EST
AMZN Hot Sheet
Rating Summary:
    21 Buy, 11 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 19 | Down: 18 | New: 27
Shares of Amazon.com (Nasdaq: AMZN) are up more than 4% today on the back of a Bernstein upgrade this morning. The stock is now trading around $125.93.

The analyst raised his investment rating on the online-retailer from Market Perform to Outperform, also raising his price target from $125 to $160, now the new "Street high" target.

The firm believes that "the company's unique and differentiated attributes have shown their value once again by enabling Amazon to reaccelerate revenues much sooner than expected coming out of the economic downturn." Despite a recent run-up in Amazon.com's stock price (up 35% since reporting strong Q3 results), the Bernstein analyst feels that the market is still not giving Amazon.com a proper valuation given:
  1. sales growth estimates that are too low,
  2. potential operating margins which are currently being underestimated, and
  3. an under-appreciation of the company's strong cash flow levels.
The analyst also notes that Amazon's strong cash flow boost is "sustainable and will increase in 2010." Cash flow this year and next will benefit as the company incurred a large amount of capex last year related to its distribution center expansion. The analyst concluded the note by saying that Amazon's strong Q3 results confirmed that the retailer is actually closer to the "fifth inning rather than the ninth and there are still many more years of profitable future growth to come."

Stay tuned to our Analyst Ratings page to get all the upgrades/downgrades on shares of Amazon.com in real-time.

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