UPDATE: Citigroup Upgrades Amazon.com to Buy, Raises PT on Multiple Positive Factors

In a report published Tuesday, Citigroup analyst Mark May upgraded the rating on Amazon.com AMZN from Neutral to Buy, and raised the price target from $325.00 to $354.00. In the report, Citigroup noted, “We are upgrading Amazon to Buy for three main reasons: 1) We believe Amazon's valuation represents a good risk/reward as we see valuation support near $300 and upside to at least $354 without assuming multiple expansion; 2) When looked at on a gross profit basis, top-line growth has remained strong (e.g., retail segment GP +25% in CY14), and Q4 online holiday datapoints seem to bode well for 4Q14 results; and, 3) We believe margins can reverse the recent trend and rise in CY15 as we do not expect the multiple factors that came into play in 2014 to worsen in 2015. Despite adjusting estimates for FX, our target increases to $354 as a result of shifting the calendar forward.” Amazon.com closed on Monday at $291.41.