Amazon.com Inc.'s stock slipped 0.1% in midday trade Thursday, but outperformed the broader stock market, after the online retailer was upgraded at Canaccord Genuity, which said valuation is now "as reasonable as it has been in years." Analyst Michael Graham raised his rating to buy from hold, and boosted his stock price target to $750, which was 40% above current levels, from $600. Graham said he had "regrettably missed last year's big move" in Amazon's stock--it more than doubled in 2015--because he was concerned that margin improvement would slow. But with the stock down 21% year to date, he suggested the price more appropriately reflected his concerns. Other reasons for the upgrade include expectations of continued strong sales growth, gains in ecommerce market share and significant growth in Amazon's cloud business. "We believe [Amazon's] stock is unlikely to truly retreat into 'value' territory as long as top-line momentum is strong, and we expect this to persist for the foreseeable future," Graham wrote in a note to clients. Amazon's stock was declining Thursday much less than the technology-heavy Nasdaq 100 , which fell 0.7%, and the S&P 500 , which was down 0.3%.
Copyright © 2016 MarketWatch, Inc.
Continue Reading Below