Amazon.Com’s price target raised to $455 by Oppenheimer
Analysts at Oppenheimer increased their price target on shares of Amazon.Com (AMZN) to $455 from $440. The Analysts reiterated their “Outperform” rating on the stock saying underperformance has created a Buying opportunity.
“We are reiterating our positive thesis as AMZN shares remain 8% off their 52-week high. While the underperformance was driven by slower 4Q orders and gross profits, we believe the long-term story remains intact and see several positive catalysts: 1) $20 Prime price increase should add $0.60-$0.70 to 2015E EPS; 2) gross profit/customer outperforming US/European markets by 860 bps, suggesting continued share gains; 3) CPG opportunity remains large; and 4) valuation compelling based on sum-of-the-parts with AWS conservatively valued at 6x sales and eCommerce at a 32x P/E assuming 6% terminal margin.” Oppenheimer said in a note to clients.
“Given AMZN’s strength in analyzing customer behavior, we believe the $20 increase will result in limited churn. Assuming Prime customers increase from 21M at year-end 2013 to 25M at YE2015, with a 16% churn rate, this adds $453M of EBIT, or $0.62 to our EPS estimates” it added
Shares of Amazon.Com (AMZN) closed at $375.04 on Monday.
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