Amazon target raised to $2225 at Aegis Capital -- History is on your side with Amazon; Buy into the shareprice weakness
Aegis Capital raises their AMZN tgt to $2225 from $2063 after rolling forward valuation to year-end 2019. Firm continues to see the retail business taking share from traditional retail and investments Amazon continues to make across advertising, logistics, fulfillment, digital content, devices, India, AWS, and physical stores, should drive faster top-line growth and continued margin expansion. They see a few reasons why investors should worry less and why retail fundamentals remain healthy: 1) comps were tough, with higher 1P contribution in the year-ago quarter; 2) the accounting shifts of digital media content from 1P to 3P and shift of Diwali sales into 4Q this year. 3) spend per Prime member continues to grow at a healthy pace; 4) acquisition of Prime memberships continues to grow; 5) Amazon is making significant headway in emerging markets such as India; and 6) after two years of significant capacity builds and hiring growth the slowdown in expense growth reflects efficiency of prior investments rather a slowdown in demand.