Analyst: Whole Foods Delivery Boosts Amazon Prime Value

J.P. Morgan values Amazon Prime at 6.5 times its annual cost

Managing Editor
May 14, 2018 at 10:26 AM
facebook twitter linkedin, Inc. (NASDAQ:AMZN) stock is up 0.3% to trade at $1,607.52 this morning, after receiving some bullish analyst attention from  J.P. Morgan Securities. Although no price-target hike or upgrade was given, the brokerage valued Amazon's Prime subscription service at $785 per year, nearly seven times its annual cost -- and more than 44% more than its 2016 estimated value. The analyst in coverage cited several new benefits from the past year such as the Whole Foods delivery service and two-day deliver as reason for the growth.

On the charts, AMZN shares have relied on support from their ascending 80-day moving average, a trendline that caught the last two pullbacks in April. The equity has added more than 37% in 2018 alone, yet remains off its April 27 record high of $1,638.10.

Options traders are staying optimistic. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows AMZN with a 10-day call/put volume ratio of 1.37, which ranks in the 96th annual percentile. This suggests calls have been purchased over puts at a much faster-than-usual clip over the past two weeks -- and those purchasing short-term options doing so on the cheap.

Analysts are upbeat toward the FAANG stock, too. Of the 34 brokerages covering the shares, 31 maintain a "buy" or better rating. Plus, the average 12-month price target of $1,827.93 is a nearly 14% premium to current trading levels.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners