Are Amazon Upgrades Getting Out of Hand?

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Amazon, Inc. (NASDAQ: AMZN) has made an incredible run in 2017 so far — and many are chasing it still higher. But at some point you have to wonder how high is too high? The stock has climbed about 50% year to date, including 18.5% in this quarter, but it has been slowing down recently.

Instinet recently made a call on Amazon, raising its price target to a Street-high $1,360, implying an upside of roughly 20% from the current level.

Most of this call is based on the firm’s belief that Amazon can perpetually grow SG&A as a dependent on gross rate expansion. Considering product costs are unlikely to ease, a mix shift to higher margin segments could drive gross margin expansion.

Accordingly, Instinet believes that mix shift alone could drive about 1,000 basis points of long-term gross margin lift, thus enabling a $160 billion investment into deepening Amazon’s moat.

Here’s what other analysts are saying about Amazon:

  • Citigroup reiterated a Buy rating.
  • KeyCorp has a Hold rating.
  • Loop Capital has a Buy rating with a $1,300 price target.
  • Leerink Swann has a Buy rating.
  • Stifel has a Buy rating.
  • Cantor Fitzgerald has a Buy rating.

Shares of Amazon were last seen at $1,127.07, with a consensus analyst price target of $1,220.74 and a 52-week range of $736.70 to $1,139.90.