Argus Downgrades Amazon On 'Run-Up'

In a report published Monday, Argus analysts downgraded

from Buy to Hold. The downgrade follows the sharp surge in the company's stock in 2015, following a lackluster 2014. Amazon's stock sky rocketed 43 percent, following the company's announcement of its 1Q earnings. The analysts believe that the stock is fairly valued at present. On the other hand, the company's sales were adversely affected due to negative currency movements in 1Q15, despite which Amazon was able to post robust margin expansion. "The company broke out the results of its Amazon Web Services division for the first time. AWS revenue grew a blistering 49% in 1Q15, to $1.6 billion, though the business accounted for just 7% of total revenue," the analysts said. Argus expects the company to continue to spend on growth and infrastructure initiatives through 2015. The EPS estimate for 2015 has been lowered from $1.57 to $0.98, while the EPS estimate for 2016 has been raised from $1.88 to $1.92. According to Argus, "the company continues to move forward on a number of fronts critical to its business, including the expansion of its Prime membership loyalty program, international growth, the further development of the Kindle/Fire device ecosystem, and Amazon Web Services, or AWS - for which management provided detailed results for the first time."