Amazon‘s (AMZN) hire of NBC Entertainment president Jennifer Salke has the prospect of lifting the profile of its also-ran original video production, according to a report today by D.A. Davidson‘s Tom Forte, who reiterates a Buy rating on the shares, and a $1,800 price target.
The hiring of Salke, who is responsible for hits such as “This Is Us,” was disclosed by Amazon on Friday, as related by Reuters‘s Jeffrey Dastin.
The hiring of Salke to run Amazon Studios, which produces original content for Amazon’s ” Prime ” member program, has trailed Netflix (NFLX), Time Warner‘s (TWX) HBO, and the consortium Hulu, notes Forte. It is “low man on the totem pole when it comes to attracting top talent.”
But it also has “a lot of potential,” he believes:
When comparing its most successful shows to date, such as “Man In the High Castle” and “Transparent” to others’, such as Netflix’s “House of Cards” and “Orange Is the New Black” and, even, Hulu’s “Handmaid’s Tale”, we believe Amazon Studios has had modest, relative success. Its track record in movies, is also modest, with arguably two of its biggest hits, so far, “Manchester By the Sea” ($78M global box office, according to Box Office Mojo) and “The Big Sick” ($56M) generating much better reviews than dollars at the box office. We are hopeful, the combination of Ms. Salke’s hire and Amazon’s reported change in strategy to focus on content with greater potential for mass-market appeal, could result in bigger successes for both its future proprietary TV and movie content. We still see the potential for Amazon Studios to have a blockbuster, in the future, akin to Disney’s “Frozen”, which it could monetize not only at the box office but also via licensed merchandise, including toys sold on and off its platform. With Ms. Salke in the fold, we will be following its efforts to elevate its proprietary efforts in TV and film content.
Noting the 3.7% pullback in the recent sell off, Forte rules investors to “take advantage of the pullback” and buy Amazon stock.
Amazon today is down $2.78, or 1.6%, at $173.33.
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