Amazon (AMZN) has received approval for its fleet of unmanned Prime Air delivery drones from the Federal Aviation Administration (FAA), reports CNBC.
The FAA approved the drones under Part 135 of FAA regulations which means Amazon can now carry property on small drones “beyond the visual line of sight” of the operator.
According to CNBC, Amazon will now use the FAA’s certification to begin testing customer deliveries. Both Alphabet’s Wing and UPS boast similar approvals for drone delivery.
“This certification is an important step forward for Prime Air and indicates the FAA’s confidence in Amazon’s operating and safety procedures for an autonomous drone delivery service that will one day deliver packages to our customers around the world,” cheered David Carbon, vice president of Prime Air.
“We will continue to develop and refine our technology to fully integrate delivery drones into the airspace, and work closely with the FAA and other regulators around the world to realize our vision of 30 minute delivery” he added.
Shares in the e-commerce giant have rallied an incredible 86% year-to-date, and the stock boasts a bullish Strong Buy consensus from the Street. Meanwhile the $3,726 average analyst price target indicates 8% further upside potential lies ahead.
Stifel Nicolaus analyst Scott Devitt recently raised Amazon’s price target to $3,500 from $3,300 and maintained a Buy rating saying that the stock remains one of his favorite large cap growth names. Devitt views Amazon is well-positioned to continue to benefit from the accelerated shift to e-commerce and cloud services.
“The environment for e-commerce remains favorable as the ramifications of the pandemic are staying with us for longer than anticipated. While some have concerns of deceleration in the AWS business, we believe the weaker economic backdrop will lead more customers looking to adopt cloud services to lower costs,” Devitt wrote in a note to investors.
“The continued migration will be gradual over time. As the leader in e-commerce and cloud services, Amazon remains a core holding” he concluded. (See AMZN stock analysis on TipRanks).
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