Market Overview

Amazon Brings More Price Cuts To Whole Foods In Time For Holidays

Amazon Brings More Price Cuts To Whole Foods In Time For Holidays
Related AMZN
Gene Munster Talks Apple, Amazon-Target, Tesla On PreMarket Prep
Loud And Clear: Sonos Boasts High Demand In Q4 Print
Amazon's Margins: What Will They Be In 2029? (Seeking Alpha), Inc. (NASDAQ: AMZN) is going full throttle in the grocery space: within three months of the completion of its acquisition of grocer Whole Foods Market, the company has announced a third round of price cuts.

The Analyst

KeyBanc Capital Markets analyst Edward Yruma has a Sector Weight rating on shares of Amazon.

The Thesis

Amazon announced its decision Wednesday to continue with price investments in the recently acquired Whole Foods stores, Yruma said in a note. (See Yruma's track record here.) 

This marks the third significant round of price cuts, with the items now incorporating select packaged goods, Yruma said. Price investments are expanding within the 365 Everyday Value line, the analyst side. 

With these cuts, the company intends to reach more people, Yruma said, citing comments by CEO John Mackey. As the holidays approach, the reduced prices for turkey items are unsurprising given ample industry supplies and historically low prices, the analyst said. 

See also: Is Amazon Worth $1 Trillion? Morgan Stanley Does The Math

"Additionally, recent channel checks and industry sources indicate grocery retailers have lowered prices on dairy items (with some utilizing milk as a loss leader) in an effort to drive more in-store traffic," Yruma said. 

Citing data from KBCM store checks, KeyBanc said organic grocery items saw a 23 percent price reduction, on average, with the steepest cut of 42 percent for Tom's of Maine Deodorant Stick followed by Organic Short Grain Rice at 35 percent.

The Price Action

Amazon shares have been bouncing around the psychological resistance point of $1,000 of late and are now comfortably above the mark. The shares have notched up a gain of 50.89 percent year-to-date.

Amazon was up moderately in pre-market trading after losing 0.89 percent to $1,126.69 on Wednesday amid the price cut announcement.

Related Links: 

Amid Grocery Delivery Shutdowns, It Appears Even Amazon Cares About Costs

Amazon Could Grow Faster Internationally Than It Did In The U.S. 

Photo courtesy of Whole Foods.

Latest Ratings for AMZN

Oct 2018JefferiesMaintainsBuyBuy
Oct 2018Bank of AmericaMaintainsBuyBuy
Oct 2018BarclaysMaintainsOverweightOverweight

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Amazon Edward Yruma KeyBanc Capital Markets Whole FoodsAnalyst Color Reiteration Analyst Ratings Best of Benzinga


Related Articles (AMZN)

View Comments and Join the Discussion!

Latest Ratings

CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Morgan Stanley CEO Gives Trump's Corporate Tax Plan A Thumbs-Up

Univ. Of Michigan Economists: 'Trump Bump' Has Yet To Transpire