Goldman Keeps 'Outperform' on Amazon

Analyst Anthony Noto sees upside potential for the online bookseller as inventory falls and visibility returns

Goldman Sachs reiterates its market outperform rating on (AMZN ).

Analyst Anthony Noto says results should get better from here and that the stock should continue to be strong. Noto thinks inventory-turn acceleration and visibility of positive operating income could lead to an inflection point in the stock.

While execution remains critical, the following factors are favorable: 1) Deceleration in books, music & video sales should stabilize due to easier comparisons, 2) Elimination of eToys and other companies provides a one-billion-dollar opportunity, 3) Additional ACN pacts will help drive leverage/growth, 4) Q1 gross margin of 25%+ increases the financial flexibility of Q4 profitability despite slower growth.

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