Goldman Has Buy Rating On Amazon.com Inc. (AMZN)

Goldman Sachs has a Buy rating and a $200 price target on shares of Amazon.com Inc. AMZN. In a note to clients, Goldman writes, "Amazon and its local government partners have announced seven new fulfillment centers so far in 2011 - two in Tennessee, one in South Carolina, two in Japan, one in Germany, and one replacement in Scotland. Amazon attributed its margin contraction in 2010 partly to the company stepping up from three center additions in 2009 to 13 in 2010. We believe Amazon will likely add as many or more centers and square footage in 2011 as 2010. Because Amazon is growing revenue over 30% per year, adding up to 30% more centers (i.e., up to 17 centers) does not automatically mean lower margins; margins fell in 2010 because Amazon increased its center additions 333%, much faster than revenue growth, and built out Amazon Web Services globally. All else equal, we see the new centers as competitive with eBay in Europe, and with Rakuten in Japan. The two new Japan fulfillment centers expand Amazon's footprint outside Tokyo and Osaka, the home of all its existing centers and (we assume) the source of most of its Japan revenue, to north- eastern and central Japan." Shares of AMZN gained $3.22 on Friday to close at $188.75.