It looks like the price target battle that was going on among Wall Street analysts is over. That is, except one firm that has raised its target so high that it’s unlikely any other firm will dare to go, at least not any time soon due to Thursday night’s earnings report. In addition to the huge miss on the bottom line, investors were spooked by the holiday quarter guidance and sent Amazon shares tumbling as a result.

 

Same song for Amazon, different quarter

Susquehanna analyst Shyam Patil raised his price target for the stock from $950 to a massive $1,250 per share, which is the highest target we’ve seen. The new target price comes as he pushes his valuation out to 2017. He reiterated his Positive rating and said that this is basically a repeat of what the online retailer has done before.

Amazon posted earnings of 52 cents per share, an increase from the year-ago quarter’s 17 cents per share but a significant miss against the consensus of 76 cents per share. Revenue was just ahead of estimates, however, coming in at $32.71 billion versus Wall Street’s $32.67 billion.

Patil noted in his report to investors after last night’s release that profitability has entered the conversation again. The online retailer has been known to invest heavily in future growth, but this year it looked like things were changing—at least until the third quarter print. Patil notes that the investment was heavier than “normal” and said he expects this to continue for a while but “remain lumpy.” However, he also argues that it makes sense because Amazon faces big opportunities in both e-commerce and the cloud.

Amazon’s outlook disappoints

The company guided for fourth quarter revenue to be between $42 billion and $45 billion, which Patil called “fine” because it bracketed both his estimate and consensus. However, investors were clearly disappointed because the consolidated segment operating income outlook appears to suggest that the heavy investing continues.

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