Oppenheimer Remains Bullish On Amazon As AWS Set To Drive 3Q SOI Upside

In a research report sent to investors today, Oppenheimer analyst Jason Helfstein assigned an Outperform rating on Amazon (NASDAQ:AMZN) with a price target of $415.

Helfstein explained: “We are raising 3Q14E NA revenue & consolidated EBITDA estimates by 1% and 6%, respectively, on a more bullish AWS outlook. According to Oppenheimer & Co.’s Cloud Services analyst (Tim Horan), checks indicate AWS volumes are growing +25% q/q, following aggressive 2Q price cuts. Traditionally, weak AWS results (driven by price reductions), are followed by strong sequential growth from higher volumes (Exhibit 1). As a result, we are now forecasting AWS revenues +11% q/q vs. +3% previously. Assuming incremental EBITDA margins of 50-60% for AWS, we estimate AWS to contribute at least $70M in incremental 3Q EBITDA. As a result, our 3Q EBITDA estimate is now 3% above the Street. Lowering 4Q revenue estimates by 1% on currency.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Helfstein has a total average return of 17.9% and a 61.2% success rate. Helfstein has a 1.6% average return when recommending AMZN, and is ranked #103 out of 3337 analysts.

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