Amazon's Stock Climbs Further Into Record Territory After Upbeat Wells Fargo Note

Amazon.com Inc.'s stock surged 1.5% in premarket trade Tuesday, pushing it further into record territory, after Wells Fargo analyst Matt Nemer said he believes consensus expectations for the e-commerce giant are too conservative. Nemer reiterated his outperform rating, but raised his stock valuation estimate to a range of $495 to $520 from $421 to $450. He said current bottomline expectations are being hurt by abnormal events last year, such as a price cut at Amazon Web Services and a tax increase in Japan, resulting in estimates that don't match historical trends. Therefore, Nemer believes second-quarter adjusted EPS, which is due out on July 23, could beat consensus expectations by more than 10%. The FactSet Q2 EPS consensus is for a loss of 15 cents. "Additionally, Amazon's 'Prime Day' event [Wednesday] could drive incremental sales in Q3 and another wave of Prime members that join with a 30-day free trial and subsequently convert into paying members ahead of the 2015 holiday season," Nemer wrote in a note to clients. The stock has soared 47% year to a record close on Monday, while the S&P 500 has edged up 2%.