Baird analyst Colin Sebastian weighs in today on online retail giant Amazon.com, Inc. (NASDAQ:AMZN), after CEO Jeff Bezos spoke at Recode’s Code conference Tuesday night about artificial intelligence, privacy on the internet, his goals with the Washington Post, Amazon’s ambitions in entertainment, and more.
Sebastian wrote, “Amazon remains focused on three key principles: Low prices, vast selection, and convenient delivery. Mr. Bezos indicated Amazon is still in the early stages of growth in its core business, with Apparel/Fashion as one category of particular interest/focus.” Furthermore, “As highlighted in prior research, we believe Amazon has broader transportation/logistics ambitions beyond its current footprint, and Mr. Bezos’ comments support the view that significant investments are required to facilitate key growth initiatives (i.e., Prime penetration, geographic expansion, etc.).”
“Overall, Mr. Bezos comments are consistent with a focus on long-term growth and market opportunities (rather than margin expansion),” the analyst added
The analyst reiterated an Outperform rating on Amazon, with a price target of $780, which implies an upside of 8% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Sebastian has a yearly average return of 16.2% and a 74% success rate. Sebastian has a 36% average return when recommending AMZN, and is ranked #14 out of 3972 analysts.
Cantor analyst Youssef Squali reiterated a Buy rating on shares of Netflix, Inc. (NASDAQ:NFLX), with a price target of $140, on the back of a strong slate of Netflix original launches in 2Q:16 relative to 1Q:16 and 2Q:15.
Squali noted, “After tabulating Netflix’ 2Q:16 original series releases, we estimate a ~13% larger slate (17 notable launches) vs. 1Q:16 (15 launches), and a ~42% larger slate vs. the year-ago quarter (12 launches). Additionally, reviews to date indicate comparable ratings/quality, with an average rating of 61.3 in 2Q:16 (on rated titles so far) vs. 61.2 in 1Q:16, using Metacritic and IMDb data.”
“Our tracking of historical title launches and quarterly subscriber growth since 1Q:13 shows generally positive correlation between the two, implying that a strong 2Q:16 slate of originals bodes well for net adds in 2Q:16. While we recognize that the ongoing un-grandfathering of the $7.99 plan is likely to be a headwind to sub growth, we believe that management is being ultra-sensitive with its communication with users so as to minimize churn,” the analyst continued.
According to TipRanks.com, analyst Youssef Squali has a yearly average return of 14.5% and a 67% success rate. Squali has a 62% average return when recommending NFLX, and is ranked #8 out of 3972 analysts.
Out of the 41 analysts polled by TipRanks, 25 are bullish on Netflix stock, 12 remain sidelined, and 4 are bearish. With a return potential of 17%, the stock’s consensus target price stands at $119.92.