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UPDATE: Nomura Reiterates Buy Rating, Lowers PT on Amazon.com on Health and Runway

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In a report published Wednesday, Nomura reiterated its Buy rating on Amazon.com (NASDAQ: AMZN), but lowered its price target from $325.00 to $300.00.

Nomura noted, “The AMZN sentiment pendulum has begun swinging toward ―negative as 4Q:12 revenue and unit deceleration has caused the stock to underperform the S&P 500 by ~690bp since 4Q results. In this note, we reinforce our view about why gross profit and gross merchandise value (GMV), not revenue, are more accurate metrics to assess AMZN‘s health and runway. There is no denying AMZN‘s revenue is slowing, but part of this deceleration is due to the growth of 3P business. Through this lens, AMZN‘s business appears more stable, growing ~37% in each of the past 3 years. Despite the cuts and a modestly lower non-CE estimate (to more closely track the recent pace of gains), the runway is still long, as our new GMV forecast only has AMZN reaching ~6% share of non-consumer electronics personal expenditure. We continue to rate AMZN Buy, as we are attracted to its GMV share-gaining story and path toward higher profitability. FY13E EPS from $1.68 to $1.73; FY14E EPS from $3.7 to $3.96.”

Amazon.com closed on Tuesday at $269.75.

Latest Ratings for AMZN

DateFirmActionFromTo
Nov 2014Piper JaffrayMaintainsOverweight
Nov 2014NomuraInitiates Coverage onBuy
Oct 2014Morgan StanleyInitiates Coverage onOverweight

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