Citigroup Boosts Amazon Estimates and PT to $170, Says AMZN is "iPod of the Book World" (AMZN)
12/17/2009-During Citigroup's daily morning call the bank's analysts discussed shares of Amazon.com Inc (NASDAQ:AMZN) and lifted its Q4 and FY 2010 estimates as well as its price target for the online retailer.
Citi analyst Mark S. Mahaney raised his Q4 GAAP EPS estimates by $0.08, or 13%, to $0.72 and also boosted his 2010 GAAP EPS by $0.40, or 16%, to $2.92.
Mahaney also boosted his price target on shares of Amazon.com to $170, up from its previous target price of $140, based on 35x 2011 Non-GAAP EPS of $4.88 or 24x 2011 FCF of $3.39 billion.
Citigroup cited four key near-term updates for its boosted estimates;
1)eCommerce Channel Checks suggest accelerating Online Retail and AMZN market share gains - 73% Y/Y holiday SSS growth on AMZN's platform, per ChannelAdvisor
2) comScore Traffic Analysis shows accelerating AMZN Website trends - 19% Y/Y visitor growth in Oct. & Nov. vs. 18% Y/Y in Q2 and 9% Y/Y in Q2
3) Quarterly eShopping Cart analysis continues to highlight AMZN Selection Superiority and Competitive Pricing Position
4) NPD Video Game Console & Software QTD Sales Trends indicate Less Worse - though clearly still weak (down 24% Y/Y/down 8% Y/Y) - trends.
In addition, Citigroup increased its Kindle estimates, basing its move on a series of datapoints and analysis. Citi now sees Amazon selling approximately 2 million kindles in 2009 (up from its previous estimate of 1.5 million). Mahaney also said Amazon may generate $1.6 billion in total Kindle device and book sales by 2010, about 5% of its total revenue.
Mahaney concluded by saying that "The Kindle has definitively established itself as the "iPod of the Book World."
by Chip Brian