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Analysts Fight The Market On Amazon, See Long-Term Value In Prime

Analysts Fight The Market On Amazon, See Long-Term Value In Prime
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Analysts offered a range of opinions on, Inc. (NASDAQ: AMZN)'s fourth quarter, with many placing faith in Amazon's capacity for long-term growth in the form of Amazon Prime services.

Piper Jaffray: 'An Opportunity'

Piper Jaffray was bullish on Amazon's long-term prospects, concluding that Amazon missed margin expectations by adding more Amazon Prime subscribers than anticipated. While this forced margins to take a hit, Prime subscribers offer long-term value to the company.

The firm maintained its "overweight" rating and $800 price target.

"We view the selloff in shares of AMZN as an opportunity for investors," analysts wrote. "Prime adoption, Prime usage, and FBA use was stronger than guidance had assumed. We see this overall as a long-term positive."

Credit Suisse: Wall Street 'Mismodels' Amazon

Credit Suisse believes the Street "mismodels" Amazon trading by emphasizing operating income guidance over EBITDA.

Related Link: Yoshikami: Amazon Trades On 'Hope,' Not Fundamentals

The agency adjusted its FY16 revenue and CSOI forecasts to $130 billion and $6.7 billion, respectively, versus prior ratings of $130.1 billion and $6.2 billion.

Benchmark: Consensus 'Too Aggressive'

Benchmark also thought the Street was too harsh on Amazon, pointing to the company's strong 2016 outlook and early phases of international expansion as reasons for confidence, especially compared to eBay's grim forecast.

"We believe consensus was a bit too aggressive in light of the global backdrop, with our forecast calling for revenue of $35.6 billion and operating income of $1.01 billion, both of which Amazon surpassed," analyst Daniel Kurnos said.

The firm raised its price target to $735 and reiterated its "buy" rating.

Macquerie Wants To Own

Macquerie expressed concern over the beginning of a new investment cycle, but noted that "this is a demand driven investment cycle, and over the longer-term, that is a very good reason to invest," according to analyst Ben Schachter.

Schachter also looked at volume of Prime subscriptions as a point of investor confidence, offering a "conservative" estimate that at least a a quarter of U.S.households had a Prime membership.

"At the end of the day, we want to own a company that has too much demand for its products and services," Schachter concluded.

However, Macquerie reiterated its "overweight" rating and lowered its price target to $725.


Needham saw Amazon leaning heavily on third-party suppliers in the holiday shopping season, which drove up variable costs. The firm did not change its "hold" rating or price target.

Raymond James

Raymond James maintained a "strong buy" rating and raised its price target to $760.

Market Action

Amazon shares were still hurting off of its quarterly report this week, with stocks down 8 percent since open at time of writing.

Latest Ratings for AMZN

Feb 2018NomuraMaintainsBuyBuy
Feb 2018Credit SuisseMaintainsOutperformOutperform
Feb 2018JMP SecuritiesMaintainsMarket OutperformMarket Outperform

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