UPDATE 1-Credit Suisse raises Amazon to outperform

* Raises to "outperform" from "neutral"

* Expects higher margins on changing product mix

* Increases price target to $270 from $190

* Sees Amazon's CSOI rise to $3.2 bln in 2013 from $1.7 bln in 2012

May 15 (Reuters) - Credit Suisse upgraded Amazon.Com Inc to "outperform" and said its expects earnings at the world's largest internet retailer to improve as Amazon's high-margin businesses contribute more to its revenue.

Most analysts do not focus on Amazon's earnings per share, but follow operating income and consolidated segment operating income (CSOI), which exclude stock-based compensation and other expenses.

Analyst Spencer Wang expects Amazon's CSOI to almost double to $3.2 billion in 2013 from his 2012 estimate as high-margin businesses such as 3P (Amazon's Marketplace), digital and the Amazon Web Services cloud computing platform increase their shares in overall sales.

The company's CSOI margin is expected to fall to 2.7 percent this year from about 6.4 percent in 2009, before improving to 3.9 percent in 2013.

"Amazon's thin margins result in an outsized impact on valuation from relatively moderate estimate changes," Spencer Wang wrote in a note to clients.

Wang, who raised his price target on Amazon's stock to $270 from $190, is rated three stars for the accuracy of his earnings estimates on the company, according to Thomson Reuters' Starmine.

In April, Amazon, which competes with EBay Inc, reported first-quarter earnings that were well above investors' bullish expectations.

Amazon's shares were trading up 3 percent at $229.16 on Tuesday on the Nasdaq.