Sometimes there's research that deserves extra attention and Morgan Stanley's new one on Amazon (AMZN) is one of them, TheStreet's Jim Cramer said.
Cramer called it one of the most thoughtful analyses of "what the merger might mean" between Amazon and Whole Foods Market. It talks about what happens next and how big it might be. Morgan Stanley analyst Brian Nowak says that Whole Foods can actually boost Amazon Prime signups.
Norwak estimates there are 5 million Whole Foods shoppers that are not Prime members. Amazon can likely get half of that group to convert, accelerating Amazon Prime subscription growth.
"That's important," Cramer said, "because we know how important Prime is" to Amazon. There is a caveat, though. Amazon doesn't release its Prime figures, so not only are investors unsure how many Prime members there actually are, but they're also unsure about the service's growth rate.
For the record, Nowak has an overweight rating and $1,150 price target on AMZN stock.
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Looking beyond solely the Prime service, Cramer talked about the broader implications for retail. The grocery stores suffered a "gigantic decline" but then staged a bit of a comeback. Now, they could face more pressure moving forward.
The Amazon-Whole Foods deal could be a "virtuous circle for both," Cramer said, "which is therefore a vicious cycle down for everybody else in the food business." He pointed out that stocks like Target (TGT) , Kroger (KR) and Walmart (WMT) could be in the crosshairs.
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