Amazon Profits Disappoint, But Deutsche Banks Likes Near Term Investments (AMZN)

Amazon AMZN reported weak 2Q profits after the markets closed yesterday. Investors are not impressed, and shares are down more than 10% in pre-market trading. Deutsche Bank urges you to consider buying Amazon after the sudden drop in share price. Analysts Jeetil Patel, Herman Leung, and Matt Chesler believe that Amazon will have improved profit growth in the 4th quarter and beyond. The analysts said, "We would be buyers of shares of Amazon on the overnight weakness, particularly as the near-term investment in fulfillment, coupled with healthy unit growth rates, should yield improved operating profit dollar growth in 4Q and beyond. While operating profit growth should lag unit growth in 3Q, we think Amazon is about to raise the bar on e-commerce fulfillment, thereby driving unit growth & share gains." Deutsche Bank dropped its price target for Amazon to $145 from $166, based on 24x 2011 EBIT.