S&P Credit Upgrade for Amazon.com (AMZN)

Forget about Amazon.com Inc. (NASDAQ: AMZN) winning from its new efforts in digital downloads for a moment.  Take a look at its credit rating from the credit ratings agency.  Standard & Poor’s just upgraded it based upon how well it has done while also managing its finances.

S&P raised the corporate credit rating to “A” from “A-” and assigned a stable outlook for the e-commerce giant.  The call is based in part on strong performance in a generally difficult retail environment with above-average credit ratios on solid operation.  S&P’s stable outlook implies strong performance ahead and the expectation that credit metrics will continue to be above-average.  Worth note is a conservative financial plan and the expectation that the risk profile will remain “satisfactory” in the next several years ahead.

One issue that investors may take issue with from the S&P research call is that Amazon.com has been seeing some real margin issues and its war with the states is one that just seems like the company will ultimately have to start collecting sales tax for more of its sales.  It seems as though the move from states as they try to capture sales taxes will not cover all sales by the company and not in every state, but it seems unlikely that Amazon (or more likely its customers) will be able to escape the local city and state sales taxes forever.

The call has yet to make any difference in the price of the shares of common stock because it is not a stock call.  This is a corporate credit rating call.  Shares are down 3% at $174.96 this afternoon while the market and NASDAQ are lower due to geopolitical pressure.

JON C. OGG