Stock Picks: Amazon.com, Capital One, RightNow

Plus Wall Street analyst opinions on SunPower and Bottomline Technologies

Amazon.com (AMZN)

Janney Montgomery Scott upgrades to buy from hold; raises estimates, target price

Shares of Amazon.com Inc. rose on Oct. 23 after the company Amazon blew away Wall Street's forecasts by posting a 69% increase in third-quarter earnings on sales of $5.45 billion in a report released after the close of trading Oct. 22.

Janney analyst Shawn Milne upgraded Amazon on Oct. 23. He sees Amazon continuing to gain market share despite tough competition from online sites such as eBay Inc. (EBAY).

He said the company has a good handle on costs, which will drive up earnings. Milne expects Amazon to post annual earnings growth of 25% over the next two to three years. The analyst raised his price target for Amazon shares to $135 from $82.

Milne also raised his fiscal 2009 sales and earnings estimates to $23.8 billion and $2.57 per share, respectively, from $22.6 billion and $2.38. For fiscal 2010, he raised his sales forecast to $28.6 billion from $26.5 billion and earnings of $3.10 from $2.75. The analyst's new estimates exceeded Wall Street's consensus forecasts.

Capital One Financial (COF)

Standard & Poor's Equity Research maintains buy; raises price target

S&P equity analyst Stuart Plesser said on Oct. 23 that Capital One posted third-quarter operating earnings per share (EPS) of $1.03, in line with last year's figure, and $1.11 above his estimate. Plesser said results benefited from an increase in net interest income reflecting a low interest rate environment, and higher non-interest income. Although chargeoffs increased in the third quarter, the rate of increase has decelerated and Plesser thinks they are manageable, particularly in light of Capital One's "solid" capital levels.

Plesser reduced his loan-loss provision estimates and now looks for 2009 EPS of 80 cents, vs. a previous loss of $1.19. He raised his price target by $6 to $48.

RightNow Technologies (RNOW)

William Blair upgrades to outperform from market perform; raises estimate

William Blair analyst Laura Lederman aid on Oct. 23 that RightNow is "a better and different company" than it was a year ago; it is now a material competitor in the call-center space. This service helps companies lower customer-support cost by managing inbound and outbound call volumes, explains Lederman, and replaces outdated call-center systems with more effective on demand model. The analyst said the call-center space is in an upgrade cycle and RightNow is a leading vendor.

Lederman raised her 2009 pro forma EPS estimate to 34 cents from 31 cents. She believes there is upside to Wall Street's 2010 revenue estimates.

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