KeyBanc Upgrades Amazon To Overweight On Improving Retail Profitability

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KeyBanc analyst Edward Yruma upgraded (AMZN) to Overweight from Sector Weight with a price target of $2,100. The stock in premarket trading is up $22.78 to $1,709.00.

Amazon is taking a number of operational moves to improve profitability in core retail, which could drive mid-term earnings above current consensus estimates, Yruma tells investors in a research note. He believes Amazon is "pivoting to a company with accelerating profitability." And in addition to $5B in incremental retail profitability, growth and margins remain "very strong" in the combined Web Services and advertising businesses, says the analyst.

Amazon's profits over the next three years could inflect, driven by improving retail margin expansion coupled with the mix shift to higher margin AWS and Advertising segments that combined could top $100B by 2022, Yruma contends. 

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