Amazon (AMZN) said this week it had agreed to acquire a 2% stake in Just Eat Takeaway.com’s US meal delivery business, Grubhub, and that its Prime members would be granted access to the service for 1 year.
Under the agreement, announced as part of Amazon’s July “Prime Day” promotion Wednesday, Amazon clients will be able to take advantage of free delivery on orders larger than $12 in the 4,000 cities where Grubhub has presence.
The deal is expected to bolster traffic for Grubhub, which has lost market share to competitors such as Doordash and Uber Eats.
“The agreement is expected to expand membership to Grubhub+, while having a neutral impact on Grubhub’s 2022 earnings and cash flow, and be earnings and cash flow accretive for Grubhub from 2023 onwards,” Just Eat Takeaway said in a statement, cited by Reuters.
Amazon shares closed higher for a second consecutive trading session on NASDAQ on Tuesday. It has also been the sharpest single-session gain since June 15th. The stock went up 3.60% ($3.94) to $113.50, after touching an intraday high at $114.08. The latter has been a price level not seen since June 28th ($114.85).
The shares of Amazon.com Inc have retreated 31.92% so far in 2022 compared with a 19.61% loss for the benchmark index, S&P 500 (SPX).
In 2021, Amazon.com Inc’s stock went up 2.38%, thus, it again underperformed the S&P 500, which registered a 26.89% gain.
Analyst stock price forecast and recommendation
According to TipRanks, at least 38 out of 39 surveyed investment analysts had rated Amazon.com Inc’s stock as “Buy”, while 1 – as “Hold”. The median price target on the stock stands at $180.01.