NEW YORK (TheStreet) -- Shares of Amazon.com are climbing after Piper Jaffray's Gene Munster predicted that the company's operating margin could surge. WHAT'S NEW: Amazon's operating margin, excluding certain items, could reach 12% in 2020, up from 2% last quarter, Piper Jaffray analyst Gene Munster wrote in a note to investors earlier today. The company's margins should rise as it generates a higher percentage of its revenue from its cloud computing business and its advertising business, Munster wrote. Generating a combined operating margin of 35%, the two businesses could account for 15% of the company's revenue in 2020, up from 6% this year, the analyst estimated. Also likely to boost Amazon's margins are natural operating leverage, easing spending by the company, and its efforts to increase its efficiency, Munster believes. As Amazon's margins rise, the stock should follow suit, according to the analyst, who believes that Amazon's valuation is attractive. He raised his price target on the name to $475 from $420 and kept an Overweight rating on the shares. PRICE ACTION: In early trading, Amazon rose 1.7% to $379.72. Reporting by Larry Ramer.
Click to view a price quote on AMZN. Click to research the Retail industry.
from Latest TSC Headlines http://ift.tt/1EXewuS
No comments:
Post a Comment