Prudential Says 'Sell'

Analyst Mark Rowen says bland growth for the online bookseller poses a risk for investors

Prudential cut (AMZN ) to sell from hold and lowered its price target to $9.

Analyst Mark Rowen says based on anemic growth in the books, music and video segment, the company's equity value is overextended and poses a further downside risk to investors. In a sum-of-parts analysis, the global B/M/V segment may have a value of about $3 billion; the remaining $2.7 billion of the firm's value is an implicit valuation for the rest of the product categories. In a best-case scenario, with extremely aggressive targets, Rowen estimates that could be worth $62 a share; but, worst-case, investors will see little, if any value. He prefers a middle-of-the-road scenario, which places the value of the stock between $6-$10/share.

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