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RBC Capital Bullish on Amazon.com, Inc. (AMZN) and Pandora Media Inc. (P) Ahead of Earnings

Both Amazon.com, Inc. (NASDAQ:AMZN) and Pandora Media Inc. (NYSE:P) will be reporting earnings tomorrow after market close. Mark Mahaney of RBC Capital weighed in on the two stocks ahead of the game, highlighting his estimates, potential catalysts, and concerns.

Mahaney stats

Amazon.com, Inc.

Mahaney weighed in on Amazon ahead of the company’s earnings, reiterating an Outperform rating on the stock with a price target of $705. Mahaney estimates the ecommerce giant will post revenue of $24.7 billion and a GAAP loss of ($0.18). Both of these estimates are more conservative than the overall consensus of $24.9 billion and ($0.18), respectively.

Further, the analyst believes that 2015 results and fundamental trends for Amazon will continue to provide an upward bias. He added, “Our $705 PT is based on a SOP (sum-of-parts), valuing Amazon’s three segments (North American Retail, International Retail and Amazon Web Services or AWS) separately on 2017 estimates.”

Along with the target price, the analyst also shared his upside/downside scenario for the company. On the upside, Amazon’s share price could touch $850 due to “higher than expected revenue growth rates over the next two years on stronger than anticipated unit sales growth.” However, on the...


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