Analysts from Susquehanna Financial Group and Oppenheimer weighed in on Keurig Green Mountain Inc (NASDAQ:GMCR) and, Inc. (NASDAQ:AMZN) following an acquisition announcement and an industry conference call, respectively. While one believes the acquisition has both positive and negative implications for Keurig competitors, the other remains bullish on Amazon due to a stellar holiday season and generally positive cloud industry trends.

Keurig Green Mountain Inc

Following news that JAB Holding Company will be acquiring GMCR, analyst Pablo Zuanic from Susquehanna Financial Group commented on which companies benefit and lose from the deal. The $13.9 billion all-cash deal is expected to close in 1Q16, with JAB being the main financer. The analyst states that JAB believes the 78% premium it is paying for GMCR seems cheap in general merger and acquisition terms. However, he states that this percentage is too much “given the potential loss of contracts at GMCR (c60% of volumes come from co-packaging deals), and ongoing margin erosion (mix shift to co-pack, reduced bargaining power).” Because of this acquisition, the analyst assumes that the company “has grander plans in the US (may later buy the KHC brands?) and also overseas (it may see room to bring the Keurig platform to Europe?).”

Zuanic sees several companies in the industry benefiting and losing from this deal. The first is Kraft Heinz (KHC). The analyst states, “KHC faces a conflict of interest with the bulk of its K cup growth coming from licensed McCafe, which they could lose given 3G links of KHC (MCD stopped buying ketchup from Heinz as 3G owns Burger King),” and believes KHC’s best move is to “sell their coffee brands to JAB,” eliminating a conflict of interest with MCD. Furthermore, Zuinic believes SJM, which is licensed by Dunkin Donuts to distribute its K-cups, is a potential loser from this deal, stating that the company “will have to go it alone, and that could represent disruption issues to its K-cup coffee business.”

The analyst then continues to Starbucks, stating that it “may stay with JAB” as it already has K-Cups, but due to competition with JAB owned Peet’s and Caribou, it may have to “pursue a more direct K-cup strategy.” However, the analyst believes this scenario is not likely, as he doubts “SBUX would want to be copacked by SJM (Dunkin).” As a result, the analyst thinks that SBUX will stay with GCMR, but states that “if JAB goes for DNKN next then SBUX is a likely loser from this deal.”

The analyst states a separate scenario where JAB will go after DNKN, taking the K-cup license away from SJM. In this scenario, both SJM and SBUX will have to “pursue solo K cup strategies.” Other companies Zuanic believes will be affected by the acquisition are the Coca Cola Company, Soda Stream, Pepsi Co, Nestle, and MLDZ.

Last week, the analyst reiterated his Neutral rating on GMRC with a price target of $46. As of this report, the analyst has not changed his rating but did increase his price target to $51.70. According to TipRanks’ statistics, Pablo Zuanic has a 55% success rate recommending stocks with an average return of -.06% per recommendation. Out of the 10 analysts who have rated GMRC in the last 3 months, 1 gave a Buy rating, 1 gave a Sell rating, while 8 remain on the sidelines. The average 12-month price target for the stock is $58.11, marking a 35% downside from where shares last closed.

GMCR Consensus, Inc.

Analyst Jason Helfstein recently weighed in on Amazon following Friday’s conference call with HookLogic, a CPC ad exchange where companies purchase placement on eCommerce sites. Due to Friday’s discussion, the analyst believes that the US eCommerce and cloud businesses are growing rapidly, with “a meaningful shift to mobile.”

The analyst continues, “AMZN continues to benefit from its Prime or ‘loyalist’ head-start.” The analyst also states that holiday sales data from brick and mortar stores indicated a 10% year/year decline, despite U.S. consumption acceleration, while online sales are up 20-21%. The analyst also states that “spread between Adobe’s Digital Index and peers suggest AMZN is gaining share.” Helfstein concludes by commenting that after discussions with cloud companies such ast AT&T Inc., Equinix Inc, InterXion holdings and industry consultant Tim Horan, cloud pricing remains stable despite industry struggles to keep up with demand. He maintains his Outperform rating on Amazon and is keeps his price target at $745.

According to TipRanks’ statistics, analyst Jason Helfstein has a 52% success rate recommending stocks with an average return of 9.4% per recommendation. Out of the 28 analysts who have rated AMZN in the last 3 months, 24 gave a Buy rating while 4 remain on the sidelines. The average 12-month price target for the stock is $729.04, marking a 9% upside from where shares last closed.

Jason Helfstein Stats