Amazon: Color on Quarter (918.38)
- RBC Capital Mkts raises their AMZN tgt to $1100 from $900. AMZN posted strong Q1 results, with Revenue and Operating Income coming in ahead of Street expectations & Q2 guidance bracketing the Street. Fundamentals remain very much intact as the company continues to invest aggressively.
- Wedbush notes Amazon continues to deliver substantial earnings growth, tempered somewhat by spending on new initiatives. Amazon appears intent upon growing annual profits (with some quarterly volatility), which we expect to continue as the co invests in growth. Amazon Web Services (AWS), Fulfillment by Amazon (FBA), and advertising should continue to drive growth and at high margin. As a result, they expect gross and operating margins to continue expanding rapidly. They expect international Prime membership growth to drive overall retail revenue, particularly as Amazon is rapidly expanding in India. Operating margin expansion will likely be tempered somewhat by increased spending on video content, fulfillment, and international expansion; however, the trajectory is clear and the company's investment strategy purposeful.
- Maxim raises tgt to $1075 from 100 after impressive top and bottom line results.
- KeyBanc/Pacific Crest downgraded to Sector Weight -- As good as it gets (for now); stepped-up competition may dampen near-term upside