To Buy or Not to Buy

Amazon.com stock still rates a good look-see — especially for investors with
at least a 12-month horizon, analysts at Goldman, Sachs Investment research
advised clients today following the e-tailer’s 4Q earnings report, which
included announcement of 1,300 layoffs.

In face, GS said it sees a 20 percent to 25 percent price appreciation
potential for Amazon over the next year and “recommends adding
to positions on weakness.”

Other analysts were less sanguine: W.R. Hambrecht downgraded the stock to
“neutral” from “buy,” according to CBS Marketwatch, and CS First Boston cut
its 12-month price target to $30 from $45. Robertson Stephens recommended
investors remain cautious on the stock, amid concerns over a “severe
slowdown” in its core business.

In early trading today, Amazon stock was up 50 cents to $19.43.

Goldman, Sachs lowered its 2001 revenue estimates for Amazon to $3.5 billion
from $3.9b billion and lowered its per share estimate for the year to a loss
of 87 cents from a loss of 60 cents. Amazon itself said it plans to be
profitable on a pro forma basis by the fourth quarter of 2001.

GS analysts said that while Amazon “fell short of our original revenue
estimate by $57 million, the operational results provide additional data
points that support profitability in Q4’01 and illustrate meaningful progress
toward the long-term model and achieving at least 5 percent operating
margins.

“We think the results demonstrate that the company through continued
execution can reach its operating targets and we maintain our outlook that
e-commerce by the end of 2005 will account for at least 10 percent of (all)
retail sales,” GS said.

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