Goldman Sachs Sees Amazon.com (AMZN) As 'Best Risk/Reward' In Internet, PT to $2,400

Goldman Sachs analyst Heath Terry raised the price target on Amazon.com (NASDAQ: AMZN) to $2,400.00 (from $2,100.00) while maintaining a Buy rating after the company reported Q1 profitability well above consensus forecasts, with operating income margin expanding ~360bps y/y vs. +170bps in Q4. The margin expansion was driven by AWS, advertising, and operational efficiencies, offset by deleverage in marketing primarily from sales hiring. Guidance for Q2 revenue growth on an FX-neutral basis was for +21.5% at the high-end versus +19% in Q1.

The analyst stated "We continue to believe AMZN represents the best risk/reward in Internet given the relatively early-stage shift of workloads to the cloud, the transition of traditional retail online, and share gains in its advertising business, the long-term benefits of each we believe the market continues to underestimate for Amazon".

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