SunTrust Robinson Humphrey's Peck Downgrades Amazon.com (AMZN) to Neutral

SunTrust Robinson Humphrey downgraded Amazon.com (NASDAQ: AMZN) from Buy to Neutral while maintaning a price target of $370.

Analyst Robert Peck commented, "We are lowering our rating from Buy to Neutral, as the stock has moved past our $370 2015 target price. While we remain very positive on the company's long term opportunity and execution capabilities, we think the stock’s FCF multiple is misunderstood and more expensive than some investors realize."

Peck said his key points to the downgrade are: ". Amazon’s stock has performed well lately (up 25% since 4Q earnings) as investor sentiment has overwhelmingly shifted positive more recently on Amazon, focusing on: the impending AWS segment breakout, easier Japan & media comps, and a potential Chinese partnership. While we agree that these would all be positive, we think the move reflects these. Further, we think the company will continue to invest against long term opportunities, which will weigh on FCF growth near term. Critically, we think that the stock currently trades at 70x fwd Adjusted FCF, when adjusting for capital leases vs 40% growth. Hence, we think the near term upside has been captured."

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 $380.09 yesterday.

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