UPDATE: Bank of America Raising Price Target On Amazon

Bank of America Merrill Lynch is out with a research report on Amazon.com AMZN after it reported earnings. It has a Buy rating and is raising its price target to $255. In a note to clients, Bank of America Merrill Lynch writes, "Despite a depressed margin profile which will raise concerns on Amazon's long-term margin potential, as long as growth is beating expectations, we think Street will value stock on potential (not actual) margins and earnings. Based on history, we see an upside case at 1.8x price-to-forward sales in the seasonally strong 4Q and are maintaining our Buy rating and increasing our price objective to $255 (from $220) based on 1.8x 2012E sales (up from prior target multiple of 1.6x due to holiday seasonality), within Amazon's historical forward P/S range of 0.9-2.0x" Shares of AMZN are up $13.82 in pre-market trading to $228.00.