Bear Raises Amazon to Buy

The brokerage says investors are missing the forest for the trees.
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Christmas looked poised to continue Tuesday for holders of

(AMZN) - Get Report

after Bear Stearns upgraded the stock and raised its price target.

The brokerage said investors have let concerns about competition and the retailer's profit margins cloud their view of the big picture, missing a nice opportunity in a still-young ecommerce space. Bear raised Amazon to outperform from peer perform and upped its price target to $55 from $46.

"We continue to believe in the long-term value of Amazon, and think that the ultimate revenue potential for the company has only begun to be tapped as it continues to expand into new product categories and add geographical territories," Bear said in the note.

Amazon rose 9% Monday after issuing a press release touting the "best Christmas" in the company's 10-year history. The release said Amazon had its busiest-ever selling day in the holiday run-up and announced that electronic goods had supplanted books as its most popular product category.

In premarket Instinet trading, Amazon was recently up $1.14, or 2.7%, to $43.39.