Moody’s changes Amazon to stable

Moody's Investors Service said it affirmed the Baa1 senior unsecured rating for Amazon.com, Inc. and changed the outlook to stable from negative.

"The changes in the rating outlook to stable from negative recognizes the favorable impact on Amazon's quantitative credit profile, especially interest coverage, of the significant improvement in operating margin and profitability for FYE 2015," Moody's vice president Charlie O'Shea said in a news release.

"Interest coverage has improved from sub-1 time at FYE 2014 to 3.4 times for FYE 2015, with debt/EBITDA reducing from 3.3 times to 2.1 times. Amazon continues to generate high levels of cash flow, which adds to its excellent liquidity profile, with almost $20 billion in cash and marketable securities at FYE 2015 against total debt of slightly over $20 billion.”

“Going forward, we expect Amazon to continue to gain share in online, and therefore overall, retail, with key factors driving further potential upward rating movement its financial policy and greater disclosure surrounding operating performance and strategy, as well as more consistent profitability," O’Shea added in the release.

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