UPDATE: Imperial Initiates Coverage On Whole Foods On Attractive Entry Point

In a report published Wednesday, Imperial Capital analyst Mitchell Pinheiro initiated coverage on Whole Foods Markets WFM with an Outperform rating and $48.00 price target. Pinheiro called the company's growth story as “'Whole' At Nearly Half the Price.” The analyst emphasized the attractive entry point for investors with shares down 40 percent from its highs. Imperial added that Whole Foods continues to lead in the natural and organic segment. The analyst wrote, “We believe WFM can increase revenue and EPS at a 3-year CAGR of 10% and 12%, respectively, driven by new unit growth of 10% and comparable store growth of 5%. WFM's strong unit growth development potential, coupled with an attractive ROIC and self-funding model, provides favorable earnings growth visibility, notwithstanding the recent slowdown in comp growth. "We believe investors' reset of lower comp growth and margin expectations, as reflected in the recent stock price, now provides WFM with a reasonable chance to outperform expectations.” Shares of Whole Foods Markets closed at $38.38 on Wednesday. The stock reached $38.75 in pre-market trading, up one percent. Shares are trading at $38.47 minutes after the opening bell.