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

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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
May 2015RBC CapitalUpgradesSector PerformOutperform
May 2015Bank of AmericaDowngradesBuyNeutral
May 2015BarclaysMaintainsEqual-weight

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Posted-In: Piper JaffrayAnalyst Color Downgrades Analyst Ratings

 

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