Amazon (AMZN) PT Raised to $585 at Evercore ISI; AWS and Retail Drive Upside
Evercore ISI analyst Ken Sena boosted his price target Amazon.com (NASDAQ: AMZN) to $585.00 (from $460.00) following blowout results, but maintained a Hold rating.
Sena commented, "AWS revenue growth accelerated to 81%, lapping prior year pricing cuts and supporting the notion that efforts by competitors are having diminishing effect. While aggressive investment to fund this business continues, something we recently focused on in our decision to take our rating to HOLD from BUY, its accelerated growth nevertheless clearly supports the argument for higher enterprise value. Moreover, this AWS acceleration coincided with accelerations in domestic and international retail revenue performance, contributing to revenues exceeding the high end of the company’s guidance, along with stronger domestic margins and even improved FCF metrics. As result, we feel justified increasing our target price to $585 from $460. The increase reflects not only higher overall estimates for Retail and AWS but longer forecast duration for AWS, in which we now assign a $90bn value (up from $65bn), with the longer duration providing the needed cash flow contribution to support this higher value."
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Shares of Amazon.com closed at $482.18 yesterday.