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Table 11: Amazon Estimate Summary 1Q17 2017 2017 2018 Revenue BofAML est. $35,335 $36,784 $164,532 $194,826 Growth Y/Y% 21% 21% 21% 18% Street $35,255 $36,815 $165,158 $199 387 BofAML vs. Street Above Below Below Below EBITDA BofAML est. $4,153 $4,626 $18,246 $22,022 Street $4,085 $4,835 $19,382 $24,850 BofAML vs. Street Above Below Below Below EPS BofAML est. $2.34 $2.86 $10.90 $14.37 Street $2.28 $3.30 $12.60 $18.16 BofAML vs. Street Above Below Below Below Source: BofA Merrill Lynch Global Research estimates, Bloomberg, as of 4/4/2017 Our PO of $1,100 is based on our SOP that values AWS at $127bn or $259 per share and the retail business at $413bn or $841 per share. Our 5.5x AWS multiple is a modest premium to the software/SaaS comp group at 5.0x on 2018 sales, and 0.9x multiple is a premium to a retail general merchandise comp group at 0.7x. We think the premiums are warranted given share gains and superior growth. Our $1,100 price objective implies 2.8x 2018E Price/Sales, a multiple above the high end of Amazon's historical range of 1.0-2.5x. We argue the historical P/S multiple should increase given positive 3rd party sales (3P) that is reported on a net basis, a higher AWS revenue contribution, an increasing advertising contribution, and record gross profit margins. ; : BankofAmerica <2” 16 Internet/e-Commerce | 06 April 2017 Merrill Lynch HOUSE_OVERSIGHT_014902