AMZN Kindle Has Better Prospects Than Current Expectations

Analysts at Collins Stewart upgrade Amazon.com Inc (NASDAQ: AMZN) to "buy," while raising their estimates for the company. The target price for AMZN is set to $150.

According to Collins Stewart, the Street is underestimating the earnings potential of Amazon.com’s Kindle franchise. “In our view, the strength of core biz combined with multi-billion dollar opportunities with Kindle & AWS create more significant growth opportunities for AMZN than the Street is currently estimating,” the analysts add.

“In addition to AMZN presenting an attractive entry point after being down 15% from its recent peak, we believe that, though higher competitive risk remains a concern for the Kindle franchise, the Kindle ecosystem is much bigger than what we and (the) Street previously thought,” the analysts mention. Collins Stewart has raised its EPS estimates for 2010 and 2011 from $2.69 to $2.91 and from $3.77 to $3.98, respectively.

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