We Continue To View AMZN As The Best Name In Western Markets E-Commerce, Says Deutsche Bank


In a research report sent to investors today, Deutsche Bank analyst Ross Sandler reiterated a Buy rating on Amazon (NASDAQ:AMZN) with a $375 price target, ahead of the company’s third-quarter earnings results.

Sandler noted, “Investor sentiment on Amazon is approaching all-time lows after repeated quarters of “beat and guide below consensus”, and unfortunately we expect more of the same from the company on 3Q14, and looking into 4Q14. The street is currently modeling +21% rev growth for 4Q, which we think could be guided in the “high-teens” range based the typical 1-P to 3-P mix shift in the promotional holiday period, with (-2) pts of added hit from FX. Importantly to us (but not necessarily consensus) we don’t expect a meaningful decel in GP growth in 4Q, or just under 30% Y/Y, consistent with 3Q levels, which we view as the primary metric to assess the health of AMZN’s business.”

The analyst concluded, “We continue to view AMZN as the best name in western markets e-commerce, and see support below ~1x TTM EV/GMV (~1.2x forward revenue), but admittedly are struggling to identify a positive catalyst for any high multiple internet.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ross Sandler has a total average return of 9.3% and a 50.6% success rate. Sandler has a -1.3% average return when recommending AMZN, and is ranked #271 out of 3332 analysts.

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