Amazon.com (AMZN) is in positive territory Thursday after the e-commerce giant announced its largest-ever investment in pay and benefits for its fulfillment and transportation employees. The increased pay rate will bring the average compensation package for these employees to more than $29 per hour.
"In 2018, we led the industry in increasing our starting wage to $15 per hour – more than double the federal minimum wage," said Amazon Vice President of Worldwide Operations Udit Madan in the press release.
The executive added that Amazon has continued to increase the starting wage each year since then. This newest increase reflects at least an additional $1.50 per hour for the front-line team, "which will bring their average base wage to more than $22 per hour and average total compensation to more than $29 per hour when you include the value of their elected benefits."
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In addition to the pay increase, the company will begin providing its hourly employees with a free Amazon Prime membership.
"Our front-line team members across our operations are a big part in bringing the magic of Prime to customers, and starting early next year, Prime will become part of their benefits package," Madan said. "Hourly team members in the U.S. will get Prime at no additional cost for as long as they are a part of the Amazon team."
Is Amazon stock a buy, sell or hold?
Amazon has been one of the best Dow Jones stocks this year, up more than 24%. Unsurprisingly, it also remains one of the top S&P 500 stocks to buy.
According to S&P Global Market Intelligence, the average analyst target price for AMZN stock is $219.41, representing implied upside of roughly 16% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial services firm Truist Securities is one of those with a bullish outlook on the blue chip stock, as evidenced by its Buy rating and above-average $230 price target.
"While the stock is not cheap on a relative basis, it is fundamentally compelling, in our view," wrote Truist Securities analyst Youssef Squali in an early September note. "We find management's maniacal focus on the customer (by focusing on selection/price/ convenience) and its leveraging of technology innovation to disrupt commerce, entertainment and IT services, to be strong differentiators and sustainable competitive advantages."
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