Sign InAmazon's Stock Price Expected to Hold Amidst Potential Antitrust Lawsuit and Upcoming Earnings
Summary
As of July 25, 2023, Amazon's stock is showing a slightly bullish tone for the next trading day, but the potential FTC lawsuit and upcoming earnings announcement may impact its performance, making it a 'Hold' with caution advised by investors.
Fundamental Analysis
Amazon.com, Inc. (AMZN) is a massive player on NASDAQ, boasting a market capitalization of $1.32 trillion. The company had an earnings per share of $0.42, which is factored into its high price-to-earnings ratio of 307.45, indicating the significant expectations of growth from the market.
A noteworthy development is the potential Federal Trade Commission (FTC) antitrust lawsuit that could potentially break up Amazon. Consequences of these legal action could affect the firm's operational scope and profitability, though some commentators hypothesize it might even provide advantages to shareholders.
From a news perspective, Amazon seems to be experimenting with its business model, such as ceasing operations in its first checkout-free U.K. store. It’s an indication that the company is prepared to pivot when required, reflecting its adaptive approach to market changes, a trait often appreciated by investors.
Technical Analysis
Amazon's stock ended trading on July 25, 2023, at $129.13, a slight 0.26% uptick from the previous session. The share traded between $128.53 and $129.58 during the day, indicating some volatility. The Relative Strength Index (RSI14) of 47 suggests the stock is neither in overbought nor oversold territory.
The 200-day moving average stands at $105.11 and the 50-day moving average at $124.80, both figures being below the current price, suggesting bullish sentiment in the market. Furthermore, the Moving Average Convergence Divergence (MACD), a prominent oscillator indicating market trend, also points to the positive territory.
However, when compared to the annual extremes, the current selling price is closer to the year's high ($146.57) than the year's low ($81.43), which may suggest a potential downward correction in the future.
Target Price and Predictions
Analysts have set a target price range of $97.78 to $270 on Amazon's shares for the next 12 months, with a consensus target of $160.96 and median of $155. Given the company's trading price of $129.13, the consensus target indicates a potential upside.
Estimate for Next Trading Day and Upcoming Week
Based on the MACD and moving averages, it is reasonable to anticipate a slightly bullish tone for the next trading day - possibly edging higher than the $129.13 closing price from July 25, 2023. However, the news of the potential lawsuit could have a negative impact on the share price in the upcoming week, resulting in some volatility.
Conclusion
Considering Amazon’s substantial presence in the market, its willingness to adjust to market changes, and the overall bullish market sentiment, the stock can be classified as a 'Hold'. While the technical indicators show potential for growth, investors should be cautious due to the pending FTC lawsuit and adjust their strategies accordingly. Potential investors should also keep an eye out for the firm's upcoming earnings announcement scheduled for August 3, 2023, which will likely influence the stock's direction.
