Sign InAmazon (AMZN) Expected to See Uptick in Price Based on Technical and Fundamental Factors
Summary
As of August 28, 2023, Amazon (AMZN) closed at $133.14, with a slight decrease of -0.09% from the previous closing price, and based on technical and fundamental factors, as well as recent news consideration, the stock is predicted to experience a minor uptick in the next trading day and potentially surpass the 50-day moving average, with a gradual approach to the discounted cash flow value over the upcoming week, ultimately categorizing it as a Buy with positive indicators, but caution should be taken due to high PE, workplace, and customer issues.
Technical Analysis
As of August 28, 2023, Amazon (AMZN) closed at $133.14, with a slight decrease of -0.09% from the previous closing price. The stock traded within a range of $131.85 to $133.95 for the day, which is marginally below the resistance level of $134.68 and significantly above the support level of $130. These are important levels to watch, as breaking above the resistance or below the support could indicate a trend direction.
The Average True Range (ATR), a measure of volatility, stands at 2.49, indicating moderate price fluctuation. Meanwhile, the Relative Strength Index (RSI), a popular momentum indicator, is 34, suggesting the stock is neither overbought nor oversold.
Looking at moving averages, the current price marginally exceeds the 50-day moving average, which is $132.09, but significantly surpasses the 200-day moving average of $108.33. The MACD, another trend-following momentum indicator, shows a positive divergence of 2.52 over the past three months, indicating bullish momentum.
Fundamental Analysis
Amazon, currently listed on the NASDAQ, holds a market capitalization of $1.37 trillion, with approximately 10.26 billion shares outstanding. The company's earning per share (EPS) currently stands at $1.28, resulting in a high price-to-earnings (PE) ratio of 104.02. This PE ratio is high relative to the market, suggesting that investors are expecting high earnings growth in the future or that the stock is currently overvalued.
The Company's Discounted Cash Flow (DCF) analysis provides a per share value of $138.43, which is slightly higher than its current price, indicating the stock might be undervalued.
With regards to analyst ratings, the majority recommended a 'Buy', with 36 'Buy' recommendations against 4 'Hold' recommendations, and no recommendations for 'Sell.' The consensus target price stands at $162.6, with a high target of $270 and a low target of $103.
News Impact
Recent news has indicated mixed sentiment for Amazon. On the one hand, the company is listed among the '5 Most Upgraded Stocks' from Q2 earnings, generating a positive outlook. On the other, some customers might experience increased costs as Amazon has been raising the free-shipping minimums for non-Prime members. The company is also facing workplace issues, with CEO Andy Jassy showing a strict stance towards employees reluctant to return to the office.
Stock Prediction
Based on the technical and fundamental factors, as well as the recent news consideration, AMZN's price might experience a minor uptick in the next trading day, potentially surpassing the 50-day moving average more conclusively. Over the upcoming week, it might gradually approach the DCF value of $138.43, as market participants assimilate different fundamental and technical indicators as well as market sentiment.
Final Evaluation
Given the technical and fundamental findings, along with the dominant 'Buy' rating by analysts, Amazon (AMZN) would be categorized as a 'Buy.' The robust operational performance, combined with the bullish momentum indicated by MACD and the discounted valuation suggested by DCF analysis, provide a positive outlook. However, high PE along with workplace and customer issues could add risks to this assessment. Investors should closely monitor incoming news and financial statements before making any decisions.
