Shares Higher Pre-Market
Shares in US tech leader Amazon, famous for its online shopping, are trading a little higher pre-market on Friday. Amazon’s shares have been lifted by the news this week that the company has launched an online pharmacy in the US.
The news has come as a major blow to traditional pharmacies, given Amazon’s strong brand identity. The new feature is currently available in 45 states. It means that shoppers will now be able to do the vast majority of their shopping in one place without the need to use several online retailers.
The launch is well placed in light of the current COVID pandemic which has meant that many US consumers are struggling. This is due to the fact that many traditional pharmacies don’t offer options such as free delivery or drive-through collection.
The new Amazon feature also has the option for co-pays, non-insurance options and also has heavy discounts for amazon prime members.
Pandemic Profitability Boost
Amazon has seen its share price exploding higher this year as a result of the surge in global demand attributed to the COVID pandemic. Online shopping has ballooned as a result of the lockdowns and social restrictions in place globally. Moreover, a shift in consumer behavior towards shopping online now due to health and safety concerns has contributed.
Amazon has seen its share price rallying around 120% higher this year. Despite some recent giveback, shares are still over 90% higher on the year.
Solid Q3 Earnings
The company posted very strong Q3 earnings of $12.37 per share. This beat estimates for a $7.41 result, with revenues firmly beating expectations also.
Looking ahead, Amazon expected further gains over the final quarter of the year, completing a year of strong profitability. Amidst the pandemic, the company has also firmly stepped up its expenditure on health and safety within its operating environments to protect both customers and staff members alike.
Amazon Trading Mid-Range For Now
Shares in Amazon continue to straddle the 3103.51 level. This marks the mid-way pivot in the 2883.33 – 3495.98 range which has framed price action over the last five months. Following the initial correction from the top of that range earlier in the year, Amazon shares have yet to correct lower than the 2883.33 level. Furthermore, despite having broken below the rising trend line from year to date lows, while that level remains intact, the focus is on further upside in the medium term in light of the longer term bullish trend.