Zacks Investment Research upgraded shares of Amazon.com Inc. (AMZN) from UNDERPERFORM to NEUTRAL on May 28, 2012, with a target price of $224.00.
Amazon.com is one of the largest online retailers in the world and despite its high market share, continues to grow strongly. However, the company's decision to significantly increase the number of fulfillment centers to cater to demand across different markets will likely have a negative impact on its earnings this year. Stiff competition and the corresponding pricing pressure are also expected to continue. We believe that current investments are supported by the strong balance sheet and expect them to drive the next growth phase, enabling international expansion. However, it is not clear how long the investment phase will continue, which makes us incrementally cautious. We therefore have a Neutral rating on Amazon shares.
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