Morgan Stanley Initiates Coverage On Food Retailers, Dollar Stores

Morgan Stanley Wednesday morning released a note initiating coverage on a number of players in the food retail and dollar store sectors.

The firm came out more optimistic on "theme-driven" food retail and noted that the dollar store sector is in need of macro improvements to warrant upside.

Based on an AlphaWise survey, Morgan Stanley is looking for natural/organic retail sales to double to $100 billion by 2020.

Additionally, the firm says traditional brick and mortar food retailers are insulated from the eCommerce threat due to lack of consumer interest.

Food Retail

Overweight

• Kroger KR - $60 PT, summary
• Whole Foods Market WFM - $50 summary
• Sprouts Farmers Market SFM - $38 summary
• United Natural Foods UNFI - $80 summary

Equal-weight

• SYSCO SYY - $40 summary

Underweight

• SUPERVALU  SVU - $7 summary

  Dollar Store

  Equal-weight

  Dollar Tree DLTR - $61 summary

  • Dollar General DG - $68 summary
  • Five Below FIVE - $41 summary