Goldman Sachs Raises Amazon's Price Target To $920

Amazon.com, Inc. AMZN reported Q2 results with the revenue beating consensus and coming in at the high end of the guidance range. Goldman Sachs’ Heath P. Terry maintained a Buy rating on the company, while raising the price target from $900 to $920.

FX-neutral revenue growth for Q2 came in at 30 percent year-on-year, while consolidated segment operating income (CSOI) was $2.1 billion, beating the consensus and the guidance range.

Q3 Guidance

Amazon guided to Q3 revenue of $33.0-$33.5 billion, as compared to the consensus forecast of $31.6 billion, while guiding to CSOI of $50-$650 million, as compared to the consensus of $831 million.

“We believe these results are further evidence that Amazon’s investment in infrastructure, logistics, and web services is driving market share gains, cash flow growth, and continued high returns on invested capital,” Terry stated.

Related Link: Amazon Is Worth More Than Wal-Mart, Costco And Target Combined

Across Regions

North American revenue grew 28 percent year-on-year, while International revenue also increased 28 percent year-on-year (FX-neutral).

Worldwide media revenue was up 11 percent year-on-year in Q2, while EGM rose 34 percent year-on-year.

North American segment operating margins grew 140 bps, while International rose 120 bps. AWS saw 58 percent year-on-year growth, despite tougher comp.

“The company plans to add nine Availability Zones over the next year. We expect this to alleviate some of AWS’s capacity constraints and accelerate revenue growth, though potentially pressuring margins near term,” Terry added.

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