Analysts at Nomura Equity Research initiated coverage on Amazon.com (AMZN) with a ‘Buy’ rating and a $410 price target in a report issued to clients on Friday. The equity research firm said [via Barron’s Tiernan Ray] that after a 16.5% decline this year, “sentiment appears quite negative due to concerns surrounding ongoing heavy investment and losses in hardware and international markets.” Nomura also said it believes “this pullback represents a buying opportunity for long-term investors.” Additionally, the firm notes that while Amazon’s growth has slowed, it is still admirably high, they write:
“While top-line growth is admittedly slowing from its five-year historical CAGR of 31%, this remains among the highest growth rates within global retail, and we expect the company to increase its top line at a solid 15-20% growth rate over the next 3 to 5 years.”
On Friday, Amazon printed a higher than average trading volume with the issue trading 4.47M shares, compared to the average volume of 3.88M. The stock began trading at $335.42 to finish the session up $2.09, or 0.63%, from the prior days close of $332.63. On an intraday basis it got as low as $331.47 and as high as $338.33.
Amazon shares are currently priced at 373.74x next year’s forecasted earnings. The stock’s price/earnings ratio is obviously problematic given that even after a 16.5% pps decline, a new shareholder is still paying a lot for revenue growth but paltry earnings. Amazon’s current year and next year EPS growth estimates stand at (228.80%) and 217.10% compared to the industry growth rates of 8.80% and 21.00%, respectively. The name has a t-12 price/sales ratio of 1.80. EPS for the same period registers at ($0.47).
Amazon’s shares have advanced 6.21% in the last 4 weeks, while declining 0.42% in the past three months. Over the past 5 trading sessions the stock has gained 1.47%.
The Seattle, Washington-based e-commerce giant, which is currently valued at $154.01B, has a median Wall Street price target of $350.00 with a high target of $450.00. AMZN is down 9.84% year-over-year as of the close of trading on Friday.