After an analyst at Stifel Nicolaus upgraded Amazon.com from buy to hold, the online retailer's shares went up 40 cents in premarket trading before this morning's opening bell—although it had already slipped back much of that gain by 10:45 AM. Still, according to Scott W. Devitt's research report, as quoted by the AP, "Amazon is the most profitable retail model on the Internet and it trades at a discount to traditional retail businesses." To him, that's "very wrong," and the stock is "dirt cheap" in comparison to where it should be valued against chains like Wal-Mart and Target.

That valuation came at a good time for Amazon, as Marketwatch reports that Merrill Lynch underlined its neutral feelings about the stock, citing an "expected gross margin decline, which would result from heavy retail price competition and weaker demand in the higher-margin media category." On the other hand, Merrill thinks the stock is still worth $40, and it's only trading at $37 and change, so that's something of a bargain, right?