Amazon Slips After U.K. Regulator Threatens Deliveroo Investment

Amazon has added 29% so far in 2019

Managing Editor
Jul 5, 2019 at 10:10 AM
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Shares of online powerhouse, Inc. (NASDAQ:AMZN) are down 0.5% at $1,928.63. Pressuring the stock is news a British competition regulator sent an initial enforcement order to Amazon, requiring it to pause its minority investment in U.K.-based mobile delivery service Deliveroo on concerns the two companies have "ceased to be distinct." In a statement, Amazon said the investment would "enable Deliveroo to expand its services, benefiting consumers through increased choice and creating new jobs as more restaurants gain access to the service."

Today's pullback is only a minor dent in the FAANG stock's long-term uptrend. Specifically, Amazon stock has added 29% year-to-date, with its rising 10-day moving average containing its recent-but-brief bout of choppiness. A bounce off this trendline from earlier this week has AMZN within striking distance of its 2019 high of $1,964.40 from early May.

While they have yet to react to today's news, analysts have not been shy about their optimism surrounding AMZN. An overwhelming 27 of 28 covering firms sport a "buy" or "strong buy" rating on the stock, with not a single "sell" on the books. Plus, the equity's average 12-month price target of $2,246.89 comes in 16.5% above current levels. 

Amazon options are looking to be attractively priced, too. This is per the stock's Schaeffer's Volatility Index (SVI) of 17%, which stands in the 1st percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectations at the moment.


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