DA Davidson: New Amazon Studios Leader Bodes Well For The Company's Large Content Investment

Amid a 6-percent pullback and the filling of a critical executive vacancy, one analyst sees a buy-in opportunity at Amazon.com, Inc. AMZN.

The Rating

DA Davidson analyst Tom Forte reiterated a Buy rating on Amazon with an $1,800 price target.

The Thesis

Amazon named NBC Entertainment President Jennifer Salke the new head of Amazon Studios on Monday. The appointment was widely welcomed, Forte said in a note. (See the analyst's track record here.)

“By hiring a new head of Amazon Studios, the company has filled an important void, and, in our view, after a potential period of disruption following the departure of its former head, should be back on track in one of its most significant areas of investment — proprietary video content,” the analyst said. 

The choice of Salke only sweetened the deal, Forte said, and brings studio experience with “This Is Us,” “Glee,” “Modern Family” and “Prison Break,” each of which were major boons to their respective networks.

Forte ranks Amazon behind HBO or Netflix, Inc. NFLX in its ability to attract industry talent, but said it has the potential to produce a blockbuster hit. 

“We are hopeful the combination of Ms. Salke’s hire and Amazon’s reported change in strategy to focus on content with greater potential for mass-market appeal could result in bigger successes for both its future proprietary TV and movie content,” the analyst said.

Price Action

Amazon shares were up 1.64 percent at $1,409.18 at the time of publication. 

Related Links:

Amazon Prime Price Increase Won't Affect Netflix, Roku

Nerd Alert: Amazon To Produce New 'Lord Of The Rings' Series

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorPrice TargetReiterationTop StoriesAnalyst RatingsDavidsonJennifer SalkeNBC EntertainmentTom Forte
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!