UPDATE: BMO Upgrades United Natural Foods, Raises PT

According to a research report released earlier today, BMO Capital Markets has upgraded United Natural Foods

from Market Perform to Outperform based on a competitor's negative report. BMO Capital Markets commented in the report, “We base our upgrade on the following: 1) we believe margins will begin to expand much more meaningfully in FY2013 and beyond when UNFI begins to accelerate the implementation of the Warehouse Management System (

) and Engineered Labor Standards to the remaining facilities (Ridgefield and Auburn will be complete by 9/12); 2) as a result, we believe EBITDA margins, EPS growth and ROIC will all improve meaningfully in the next few years; 3) we believe the top-line growth story remains intact and believe UNFI will continue to gain share from the smaller industry competitors given the breadth of the company's offering and national scale; and 4) we believe the strong balance sheet, decent free cash flow yield, improving ROIC and sustainable top-line growth justify our valuation.” BMO Capital Markets increased United Natural Foods' PT from $41 to $53. United Natural Foods closed Friday at $45.26.