UPDATE: Deutsche Bank Initiates Coverage on United Natural Foods with Hold Rating, $65 PT on Less Compelling ROIC

In a report published Thursday, Deutsche Bank analyst Karen Short initiated coverage on

with a Hold rating and $65.00 price target. In the report, Deutsche Bank “We are initiating coverage of UNFI with a Hold. Our PT values the stock at an EV/EBITDA of 12.3x and a PE of 26.2x. Among the factors that underpin our Hold rating are: 1) Although UNFI is a dominant supplier in a rapidly growing industry, ROIC has been deteriorating, despite many initiatives aimed at improving it; 2) the valuation multiple has, however, continued to expand – somewhat in lockstep with WFM, UNFI's largest customer; and 3) in contrast to WFM, however, UNFI's ROIC has been deteriorating, so UNFI's relative valuation multiple has been expanding, and UNFI is one of the more expensive names in our Universe on this metric.” United Natural Foods closed on Wednesday at $66.76.