UPDATE: Oppenheimer Initiates Coverage on Whole Foods Market
In a note released Thursday, Oppenheimer initiated coverage on Whole Foods Market (NASDAQ: WFM) with an Outperform rating and a $63 price target.
Oppenheimer analyst Rupesh Parikh outlined the key points which explain this valuation of Whole Foods.
- Whole Foods has consistently outperformed peers with 7 percent comp growth on average since fiscal year 2001. Parikh attributes this in part to Whole Foods ability to "tweak" merchandise to match evolving consumer preferences and cited such innovations as a rooftop garden and bar.
- Shares are down 20 percent vs. a 4 percent gain in the S&P 500. Parikh believes this may create a positive investment opportunity.
- Parikh expects shares to maintain a premium valuation to reflect the potential for accelerating earnings and unit growth.
- Sell side forecasts could be tweaked lower in coming quarters to fully incorporate the potential for continued price investments
At last check, Whole Foods is trading about even for the day at $52.35.
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