After several years of quiet planning and preparation, Amazon is announcing the launch of its online pharmacy business. The news has caused CVS Stock (NYSE: CVS) to drop -7.45%, Rite Aid’s Stock (NYSE: RAD) to drop -11.81%, and Walgreen’s Stock (WBA) to drop -9.20% in pre-market trading. Most of the business licenses and trademarks came from the PillPack which was acquired by Amazon (NASDAQ: AMZN) in July 2018 for $753 million.
The online pharmacy was a surprise move to market analysts who were didn’t realize how close Amazon was. It is also an aggressive move into the pharmacy industry in the middle of the Covid-19 crisis. Starting next Tuesday, Amazon plans to start offering common items including pills, medications and creams, pills.
The real win here is that Amazon will also be shipping prescriptions like insulin and Pfizer’s COVID-19 vaccine which has temperature requirements (it needs to stay cold). Thus Amazon is set for a big play in coronavirus vaccines.
Amazon Prime members who don’t have insurance can buy generic or brand name drugs will be able to buy them at a discount with or without insurance. Pharmaceutical investors should watch this as it could cause downward pressures on pricing.
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Although many may not like Jeff Bezos, his track record of success when moving into a new industry is unparalleled. Amazon stock is currently up 1.98% at 3193 in pre-market trading and looking to bounce off of the recent lows into the $3300 or higher soon. Average Target Price: $3,717.29 (34 Analysts) as of 11/04/20
|Price / Earnings||93.2||82.9||37.5|
|Price / Sales||4.7||4.7||2.7|
|Price / Free Cash Flow||65.6||47||23.7|
|Price / Book||19.3||10.9||4.1|
|Price / Tangible Book||23.5||21||100+|
|EV / EBITDA||34.5||34.7||21.5|
|EPS Predict. Pctl.||59||49||28|
|Cash Flow Predict. Pctl.||5||54||21|
Some key market pivots for Amazon stock: