Goldman Sachs More Positive On Amazon.com (AMZN), Lifts Estimates and Price Target

Goldman Sachs raised its estimates and its 6-month price target on Amazon.com (Nasdaq: AMZN) from $125 to $146. The firm is maintaining a Buy rating on the stock.

Q4 revenues estimates were raised from $8.9 to $9.1 billion, which compares favorably to the consensus of $8.9 billion. The firm raised 2009E/2010E/2011E EPS estimates to $2.62/$3.28/$4.19.

Goldman thinks news stories about online price "wars" and new wireless e-readers is driving traffic to Amazon, which Amazon is converting into revenue. The firm said more revenue even at lower gross margins can boost operating margins as Amazon scales operating expense.

The firm's $146 price target is based on 25X their 2010E FCF per share of $5.84, and 35X their 2011E EPS of $4.19.

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