Benchmark Raises Price Target on Amazon; Goldman Also Says "Buy"
Analysts at the Benchmark Company raised their price target on shares of Amazon.com (NASDAQ: AMZN) on Wednesday morning, saying that they see the potential for an upside earnings surprise when the company releases its fourth-quarter results. Their new price target on the stock is $310, a $50 hike from their previous $260 target.
They wrote that "rising digital sales, enhanced by a successful slate of device launches in September, leveraging the development of the international mobile app portal in June, and strong 3P sales could result in better-than-expected operating leverage in 4Q12 and continue into 2013, helping offset ongoing investment initiatives.
The bullish outlook comes despite lower than expected holiday shopping results at Amazon. According to comScore data, holiday sales rose 14 percent year over year versus comScore's initial forecast of 17 percent and Benchmark's estimate of 15 percent growth. Benchmark noted that "while growth had been pacing at over 16 percent for most of the holiday period, consumers appeared to significantly pull back spending in the first and last weeks of December, likely reflecting concerns over the then-upcoming fiscal cliff."
Goldman Sachs (NYSE: GS) also had a client note out on Wednesday covering Amazon. The firm re-instated its coverage of the stock with a Buy rating and a $315 price target. They wrote that "we believe ecommerce growth, driven by shrinking traditional retail footprints and favorable consumer demographics, and AMZN's share of it, should continue to exceed expectations."
Like many Wall Street analysts covering the stock, the primary headwind that Goldman cited for Amazon was the company's burgeoning capital expenditures. They concluded that "we see the level of investment and success of emerging businesses, particularly the hyper-competitive hardware business, as the most significant near-term risk to estimates and share price."
On Wednesday, AMZN was trading close to the flat-line heading into the closing bell. The stock has risen 49 percent over the last 52-weeks and is already up more than 6 percent in 2013.
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