Analysts Weigh In as Amazon Prime Day Takes Off

Analysts continue to be optimistic toward the FAANG stock

Managing Editor
Jul 15, 2019 at 9:40 AM
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Shares of e-tail powerhouse Amazon.com, Inc. (NASDAQ:AMZN) are inching their way higher this morning, last seen up 0.3% at $2,016.94, as the company's annual Prime Day event kicks off. While the 48-hour sale for Amazon's Prime members is attracting its usual bout of attention, the FAANG stock is catching the eye of analysts.

Specifically, Loop Capital reiterated its "buy" rating and $2,380 price target, saying the event delivers three purposes: to generate significant volume during a slow sales period, increase Prime subscriptions, and create free advertising for AMZN. Meanwhile, Cowen waxed optimistic on Amazon's upcoming second-quarter results, labeling its valuation "attractive."

Jefferies echoed this upbeat take, saying a "key differentiator for AMZN will be its new one-day shipping initiative. Coming into today, all but one of 28 covering analysts carried a "buy" or "strong buy" rating on Amazon stock. 

Looking into options, data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the security with a 10-day call/put volume ratio of 1.33, ranking in the 93rd percentile of its annual range. In other words, calls have been bought to open over puts at a faster-than-usual clip.

Further, Amazon stock's short-term options are attractively priced at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 26%, which ranks in just the 23rd percentile of its annual range. In other words, near-term AMZN options are pricing in relatively modest volatility expectations.

On the charts, Amazon stock has been climbing, inching its way toward fresh record highs. Just last week the stock touched a 10-month peak of $2,035.80, a chip-shot away from the e-tailer's September 2018 record high of $2,050.50. Year-to-date, the powerhouse has tacked on just almost 34%

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