Amazon Names New CEO Amid Blowout Q4 Earnings Report

The security earned at least 18 price-target hikes in response

Digital Content Manager
Feb 3, 2021 at 10:58 AM
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Amazon.com, Inc. (NASDAQ:AMZN) is the talk of the town today, after the e-tail giant reported jaw-dropping fourth-quarter earnings of $14.09 per share -- nearly double Wall Street's estimates of $7.23 per share. What's more, the company posted an impressive revenue beat, with sales surpassing $100 billion for the first time as customers turned to online shopping during a coronavirus-ridden holiday season. Perhaps even bigger news, though, is that founder and CEO Jeff Bezos will step down this summer and hand the keys to his empire to Andy Jassy, who is currently the head of cloud division Amazon Web Services (AWS).

To follow, the brokerage bunch responded with a bullish attitude. The security earned no less than 18 price-target hikes after the blowout quarterly results, including one from Susquehanna to $5,200 from $4,000. Despite the positive attention, Amazon stock is struggling for direction this morning. Shares were last seen down 0.4% to trade at $3,367.05.

Digging deeper, the equity has been taking a breather since surging to a Sept. 2 all-time high of $3,552.25. Shares have made at least a couple of attempts to rally back to these record levels, but overhead pressure at the $3,500 marks has been keeping a tight lid on gains. Nonetheless, the security seems to have bounced off its 60-day moving average, which briefly acted as a ceiling.

Analysts were overwhelmingly optimistic towards the security coming into today, with all of the 24 in coverage sporting a "buy" or better rating. To boot, the 12-month consensus target price of $3,987.34% is a whopping 18.2% premium to the stock's current perch.

That optimism is reflected in the options pits, where calls are king. This is per AMZN's 10-day call/put volume ratio of 1.74 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 96% of readings from the past year. This means calls are being picked up at a much faster-than-usual pace.

Drilling down to today's options activity, 113,000 calls and 65,000 puts have crossed the tape, which is twice the average intraday amount. Most popular is the weekly 2/5 3,500-strike call, followed by the 3,400-strike call in the same series, with new positions being opened at both. Buyers of these options expect additional upside for AMZN before the end of the week, when contracts expire. 

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