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Amazon's (AMZN) Price Target Raised by Credit Suisse

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Amazon.com Inc. 's AMZN price target was recently increased by more than 2% to $800.00 from $777.00 by investment firm, Credit Suisse. In addition, Credit Suisse analyst Stephen Ju reiterated an outperform rating on the stock.

Amazon is known for its gigantic e-Commerce business offering almost everything for purchase which is delivered at the buyers' doorstep in two days. It was one of the first companies to enter the space and has therefore enjoyed a first-mover advantage. The company has recorded tremendous growth to the point of being nearly synonymous with online shopping.

Ju expects Amazon's e-Commerce business to witness improving gross margins going forward. Also, he believes that the company needs lower costs to run the Amazon Web Services (AWS), thus reducing overall expenses and thereby increasing profits.

AWS contributes nearly half of the profits and is Amazon's cloud infrastructure service that has recently been separated from the core business. AWS provides tools that support website production, social media and mobile applications that have taken the company to the leading position in the infrastructure as a service (IaaS) space.

The success of its multi-faceted cloud computing service significantly boosted the company's third-quarter results. AWS contributed $2.1 billion to the revenues as against $1.2 billion a year ago.

Furthermore, with many businesses and services shifting toward cloud-based technologies, AWS has huge opportunity to grow.

Our Take

Over the last 60 days, 2 analysts polled by Zacks revised the estimates for the next year to $5.04, up 7.2%. For the current year, 1 analyst increased the estimates by 2.2% to $1.85, over the same time frame. The company is expected to report fourth-quarter results on Feb 4.

Amazon has expanded beyond product searches and shopping to explore new areas like mobile technology, by developing the popular Kindle range and the not-so-impressive Fire Phone. It has also made its way into drone delivery and content creation spaces.

Amazon aggressively maintains its supremacy in the chosen markets and its performance so far indicates that it is moving in the right direction.

Stocks to Consider

Amazon currently sports a Zacks Rank #1 (Strong Buy). Other well-ranked stocks in the industry are Mercadolibre, Inc MELI , Blackbaud Inc. BLKB and Groupon, Inc. GRPN . While Mercadolibre and Blackbaud have the same Zacks Rank as Amazon, Groupon carries a Zacks Rank #2 (Buy).

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AMAZON.COM INC (AMZN): Free Stock Analysis Report

MERCADOLIBRE IN (MELI): Free Stock Analysis Report

BLACKBAUD INC (BLKB): Free Stock Analysis Report

GROUPON INC (GRPN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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