Market Overview

UPDATE: Piper Jaffray Downgrades Whole Foods Market to Neutral on Lower Comp Growth Profile

Share:
Related WFM
'The Next Food Price Surge'
Stephens Analyst: United Natural Foods Is My New Best Idea
Looking For Value Among Grocery Stores (Seeking Alpha)

In a report published Monday, Piper Jaffray analyst Sean P. Naughton downgraded the rating on Whole Foods Market (NASDAQ: WFM) from Overweight to Neutral, and lowered the price target from $103.00 to $89.00.

In the report, Naughton noted, “We are moving from Overweight to Neutral as we believe slowing op margin expansion, decelerating same store sales trends, and increasing competition will limit multiple expansion. While we continue to believe WFM is the leader in a rapidly growing industry and merits a premium multiple relative to its peers, we believe upside to estimates may begin to slow. Importantly, WFM's forward P/E multiple is highly correlated with its two year comp stack which has been decelerating. Additionally, op margins are currently beyond prior peak levels and as the company invests in price, this could limit earnings growth. Bottom line, great growth story with strong management, but we believe the equity is fairly valued.”

Whole Foods Market closed on Friday at $87.78.

Latest Ratings for WFM

DateFirmActionFromTo
Aug 2015Pivotal ResearchInitiates Coverage onSell
Aug 2015CitigroupMaintainsNeutral
Jul 2015Morgan StanleyDowngradesOverweightEqual-weight

View More Analyst Ratings for WFM
View the Latest Analyst Ratings

Posted-In: Piper JaffrayAnalyst Color Downgrades Analyst Ratings

 

Related Articles (WFM)

View Comments and Join the Discussion!

Get Benzinga's Newsletters