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Analysts Split On Amazon's Firefly Pricing & Strategy

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Microsoft Could Finally Be Over the Windows Hurdle (GuruFocus)'s (NASDAQ: AMZN) newly launched Firefly smartphone came under the microscope Thursday as analysts tendered mixed views on pricing and strategy.

A skeptical Eric Sheridan of UBS maintained a Neutral rating and $365 target Thursday, saying Amazon's strategy of "pushing deeper into hardware" may boost sales but hurt profit margins because of higher costs.

Analysts appeared divided over whether the $199 cost to consumers was a good thing. It's a comparable price to that of competing smartphones.

“The price point is competitive,” assuaging fears the phone would cut into Amazon's profit margins, Topeka Capital analyst Victor Anthony said in a research note.

Anthony maintained a Buy rating on Amazon and a $140 price target, and believes the phone compares favorably with other high-end smartphones on the market.

But, Doug Anmuth of JP Morgan and Ben Schachter of Macquarie were separately disappointed with pricing.

"We were hoping for a game-changing pricing model, which didn't emerge," Schachter said, while maintaining a buy rating and $430 target.

Anmuth expressed concern that Firefly's price point and the cost of related apps might “curb its appeal.”

Latest Ratings for AMZN

Jul 2017Morgan StanleyMaintainsOverweight
Jul 2017Deutsche BankMaintainsBuy
Apr 2017BenchmarkReiteratesBuyBuy

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Posted-In: Ben Schachter Doug Anmuth Eric Sheridan JP Morgan Macquarie Topeka Capital MarketsAnalyst Color Analyst Ratings


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