Deutsche Bank Sees Opportunity in Amazon (AMZN) Pullback
Deutsche Bank maintained a Buy rating on Amazon.com (NASDAQ: AMZN) price target of $800. Shares declined after Amazon reported Q4 results. Analyst Ross Sandler thinks the pullback presents a buying opportunity.
"The pullback in AMZN shares should create a nice buying opportunity once the dust settles, we think sub 18x 2016 EBITDA or around $530 per share is a decent entry point (vs. 5 year trough is 16x). All we see happening here is a consensus reset of the misperception that retail CSOI margins would go up structurally vs. our view that the company is constantly in heavy investment mode with temporary pauses. 2015 was the pause, 2016 is the resumption of investing for global growth, which entails margins flattening out. We see no change to our long-term bullish thesis. We have slightly increased our estimates, primarily a result strong growth and margin at AWS," said Sandler.
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Shares of Amazon.com closed at $635.35 yesterday.