According to a report published by StreetInsider.com, Italy’s antitrust regulator has imposed a fine of $1.28 billion on Amazon.com, Inc. (AMZN) for taking undue advantage of its dominant market position.
Shares of the company were trading 0.5% down, at the time of writing, in the early trading session on Thursday. (See Insiders’ Hot Stocks on TipRanks)
What Did the Regulator Say?The regulator, Autorità Garante della Concorrenza e del Mercato (AGCM), said that the E-commerce giant was hurting competitors by pushing for its own logistics service, FBA, to the sellers on its platform.
Amazon does this “to the detriment of the logistics services offered by competing operators, as well as to strengthen its own dominant position,” AGCM added.
Amazon’s ResponseAn Amazon spokesperson said, “Small and medium-sized businesses (SMB) have multiple channels to sell their products both online and offline: Amazon is just one of those options. We constantly invest to support the growth of the 18,000 Italian SMBs that sell on Amazon, and we provide multiple tools to our sellers, including those who manage shipments themselves.”
Wall Street’s TakeRecently, UBS (UBS) analyst Kunal Madhukar initiated coverage on the stock with a Buy rating and a price target of $4,700 (33.4% upside potential).
The analyst is of the view that Amazon has “multiple levers” to drive margin growth.
Overall, the stock has a Strong Buy consensus rating based on 30 unanimous Buys. The average Amazon.com price target of $4,120.83 implies 17% upside potential. Shares have gained 13.5% over the past year.
Website TrafficTipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Amazon’s performance.
According to the tool, compared to the previous year, the company’s website traffic registered a 26.5% fall in global visits in November. Moreover, the website traffic has decreased 5.1% year-to-date against the same period last year.
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Shares of natural and organic food company United Natural Foods, Inc. (UNFI) jumped 13.2%, after the company reported robust third-quarter results and reaffirmed its full-year guidance.
Despite ongoing supply chain and labor challenges, UNFI managed to beat both earnings and sales estimates. With the pandemic still persistent, customers prefer at-home food solutions and UNFI is well-positioned to execute the growing demand.
Robust ResultsThe company reported adjusted earnings of $0.97 per share, a whopping 90.2% year-over-year growth, significantly outpacing analysts' estimates of $0.50 per share.
Moreover, net sales came in at $7 billion, up 4.7% year-over-year, marginally outpacing Street estimates of $6.8 billion. The sales growth was aided by favorable pricing trends, and growing demand from new and existing customers. However, these were partially offset by supply chain headwinds.
Management CommentsCEO of UNFI, Sandy Douglas, said, “I’m pleased with our start to fiscal 2022 and how UNFI is navigating a challenging operating environment while simultaneously investing for the future, including improved distribution capabilities and new facilities, to better serve our customers.”
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Reaffirms OutlookBased on current business momentum, UNFI reaffirmed its full-year fiscal 2022 outlook.
The company forecasts FY22 net sales to be between $27.8 billion to $28.3 billion, against the consensus estimate of $28.02 billion.
Additionally, adjusted earnings are projected to fall in the range of $3.90 per share to $4.20 per share, while the consensus estimate is pegged at $4.09 per share.
Analysts’ ViewResponding to the company’s quarterly performance, MKM Partners analyst William Kirk maintained a Buy rating on the stock with a price target of $62, which implies 11.5% upside potential to current levels.
Buy rating stocks come with a host of positive catalysts. Kirk lists these factors to base his optimistic view of the stock, including inflation boosting growth, fee income from promotional activities resuming soon, and the deal with Key Foods, which will accelerate growth.
Further, the analyst notes certain United Natural Foods stock risks, including the company's independent customers losing share to larger conventional grocery stores, and non-renewal of its contract with Amazon.com Inc. (AMZN).
Overall, the stock has a Hold consensus rating based on 2 Buys, 4 Holds, and 1 Sell. The average United Natural Foods price target of $49.17 implies 11.58% downside potential to current levels. However, shares have exploded 245.2% over the past year.
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