Canaccord Genuity Raises Price Target to $525 on Amazon.com (AMZN) Following 2Q Results
Canaccord Genuity reiterates a Hold rating on Amazon.com (NASDAQ: AMZN), and raised the price target to $525.00 (from $400.00), following 2Q earnings. AMZN exceeded expectations on nearly every line, with a notable 16% beat on AWS revenue.
Analyst Michael Graham commented, "Amazon's Q2 results were strong, with CSOI margin reaching the highest point in 4 years (4.6%) and CSOI dollars hitting the highest point ever ($1.1B). Revenue also exceeded expectations on nearly every line, with a notable 16% beat on AWS revenue. The CSOI margin beat vs. consensus was driven 56% by North America, 13% by International, and 30% by AWS. Management called out AWS usage, Prime membership expansion, and FBA growth as notable top-line drivers. On the bottom-line, cost efficiencies from process improvements, fixed asset leverage, and a greater focus on software and algorithms led to greater-than-expected profitability and 100%+ EPS growth. Even though management guided Q3 margins down sequentially, it appears our caution around margin expansion is unwarranted, and we are raising our EPS estimates accordingly. We are therefore more favorably inclined on fundamentals, while we find the valuation less attractive currently."
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Shares of Amazon.com closed at $482.18 yesterday.