Thursday, January 27, 2011

Kaufman Sees Amazon.com (Nasdaq:AMZN) Beat, But Possible Downside Ahead

Amazon.com (Nasdaq:AMZN) should beat analysts estimates when they report fourth quarter earnings after close today, but Kaufman sees some potential for downside, even though they raised their EPS and PT on them.

As far as beating Street estimates, Kaufman gave their reasoning as "acceleration in US eCommerce, blow out Kindle sales since the price cut and Kindle 3 launch and continued strong international sales." They added that "PF EPS should be largely in line with consensus on higher fulfillment and marketing expenses."

Kaufman raised fourth quarter EPS from $1.02 to $1.17, full year 2010 from $3.28 to $3.42 and full year 2011 from $4.68 to $4.80.

Kaufman reiterates their "Hold" rating on Amazon.com, which closed Wednesday at $175.39, dropping $1.31, or 0.74 percent. Kaufman raised their price target on Amazon from $145 to $163.

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