Amazon Shares Extend Losses, Shrug Off Upgrade From Wolfe Research

Amazon.com, Inc. AMZN extended its losses on Tuesday, a move some attributed to a recent downgrade from SunTrust.

The Seattle-based company closed Tuesday down more than 2 percent at $369.60, and off more than 5 percent from a 52-week high hit last month.

The shares shrugged off an upgrade to Outperform from Wolfe Research's Aram Rubinson, who said "imagination is needed" to see potential gains for the stock.

Related Link: Wolfe Research Notes Amazon Has 'Multiple Ways To Win,' Upgrades To Outperform

Rubinson, who offered a $450 target on Amazon, said the company could spin off its Web services unit, and thus shield its core retail business from the cloud segment's high development costs.

Also offering an opportunity to shore up the stock price, the company could exit China, where Rubinson estimates annual losses of $440 million, and obtain a new stream of revenue by adding advertising to its core site.

Notably, though. SunTrust's Robert Peck said earlier this week that "most of the valuation has been captured" from Amazon's plan to break out results for its Web services unit, as well as easier quarterly comparisons and a potential partnership in China.

Shares are up about 20 percent since Amazon posted fourth quarter results in late January.

The stock may be considerably more expensive than most investors realize, Peck added, based on its capital-intensive operations and adjusted cash flow.