S&P Capital IQ Reiterates its HOLD Rating on Amazon.com, Target Price Reduced

October 28 00:00 2011

New York, October 28 (RainbowNewsLine.com) – Analyst Michael Souers of S&P Capital IQ maintains his HOLD recommendation on the shares of Amazon.com (NASDAQ: AMZN), while reducing his estimates for the company. The target price has been reduced from $265 to $230.

Analyst Michael Souers, in a research note published yesterday mentions that the company has reported its Q3 EPS short of the estimates. Although Amazon.com has reported a 44% growth in sales, investments in technology and fulfillment weighed heavily on margins, the analyst says. The company is sacrificing its profitability in order to achieve sales growth through investments which will pay off over time, the analyst says. Analyst believes that the company’s sales will remain strong in the near-term, boosted by Kindle Fire tablets. The EPS estimates for 2011 and 2012 have been reduced to $1.35 from $2.02 and from $3.48 to $2.05, respectively.