NEW YORK (TheStreet) -- Shares of Amazon.com Inc (AMZN) were declining by 0.48% to $438.71 in mid-morning trading Thursday, after the online retailer had its rating cut to "hold" from "buy" by analysts at Evercore ISI this morning.
The firm reduced its rating, but maintained its $460 price target on shares of the online retail giant.
Evercore noted that Amazon's shares are up 45% so far this year, and approaching the firm's price target.
Analysts also said the company's rising capital leasing activity has made modeling free-cash-flow upside more difficult.
Seattle, Wash.-based Amazon.com is an e-commerce company that sells a range of products and services through its various owned and affiliated websites.
Insight from TheStreet's Research Team:
Amazon is a part of Bryan Ashenberg's GrowthSeeker.com Portfolio. Here is what Ashenberg had to say about the stock in a recent weekly summary:
Amazon's shares traded 3% higher this week. On Wednesday, Piper Jaffray reiterated its Overweight rating and $520 price target on the stock. The analyst believes the June quarter unit growth should come in between 19% and 22% based on their proprietary analysis of Google search terms, which would be ahead of the 18% to 19% consensus expectations.
While we are not looking for Amazon to maximize near-term profitability, we believe a focus on profitability needs to continue to be in the forefront of management's efforts. Amazon's first-quarter results and the newfound information on the marked profitability of the Amazon Web Services (AWS) segment lead us to conclude that the stock remains undervalued.
Despite the company's improved profitability -- and maybe even because of it -- we believe management will continue to spend heavily and invest to dominate the markets in which Amazon does business. And as AWS shows, management knows what they are doing and Wall Street will have to be patient.
We remain long-term bullish on the company as it continues to spend on growth initiatives, including Fire TV, Fire Phone, Prime Instant Video, Prime Music, grocery, international, Sunday delivery, Echo and new fulfillment and sorting centers that enable same-day delivery, at the expense of -- but not with total disregard for -- near- term profits.
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Separately, TheStreet Ratings team rates AMAZON.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMAZON.COM INC (AMZN) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
You can view the full analysis from the report here: AMZN Ratings Report