Morgan Stanley Sees Longer Ramp to Margin Expansion for Amazon.com

Morgan Stanley has published a research report on Amazon.com AMZN as the company's margin expansion appears to be experiencing delays due to the variable cost structure. In the report, Morgan Stanley writes, "With the continued unit mix-shift to Amazon.com's higher margin 3P platform, the market anticipates that 2012 will mark the beginning of a material margin expansion cycle. Our analysis indicates that margins may remain challenged in 2012 and that expansion will require substantial unit growth in the high-margin business segments in order to drive operating margin expansion." Morgan Stanley maintains its Equal-weight rating on Amazon.com, which is currently trading down $5.19 from yesterday's $199.66 closing price.