Whole Foods Market Analyst Roundup

Whole Foods Market, Inc. WFM reported fiscal Q4 earnings Wednesday inline with expectations but guided 2015 margins lower.

The stock responded positively, spiking more than 11 percent Thursday to $44.63.

Below are analyst comments on the earnings report along with current ratings and price targets.

Canaccord - Buy, $49 price target

"Whole Foods is well positioned in the growing segment of natural food retailing. The stock is no longer a growth darling but valued as a larger cap retailer with growth, a valuation we believe is well justified. Initiatives remain plentiful and along with a remodeling effort give us confidence in the comp outlook. Gross margin investment has been less impactful than feared as leverage continues to largely offset investments. Initial F2015 guidance was generally consistent with expectations and adds to our confidence in a stabilization and thus greater predictability."

Wedbush - Neutral, $40 price target

"Expect price investment and competitive pressure to offset accelerating square footage growth. Given Whole Foods’ leading position in the natural and organic category, accelerating store growth and strong balance sheet, partially offset by increased competition, we believe shares of WFM should trade at an approximate 10% premium to the peer group. Thus, using an EV/ 2015E EBITDA ratio of 9.5x, we generate our $40 PT."

Morgan Stanley - Overweight, $50 price target

"We maintain our 2015e EPS of $1.77, which is above Consensus at $1.70 and guidance implying ~$1.71. Our FY estimates represent 12 percent EPS growth in 2015e and 15 percent+ growth thereafter (vs ~9 percent guidance for 2015e). We believe our estimates are achievable given ramping new store growth, early-stage initiatives, and easing compares throughout the year. While the 'roadmap' put out in 2Q called for $1.74 EPS, we expect less of a focus on that framework going forward. Notably, the fundamental philosophy behind the roadmap remains intact."

Jefferies - Hold, $43 price target

"Whole Foods showed 4Q14 EPS upside and QTD comp improvement as price cuts and a new ad campaign kicked in. As we anticipated, price/gross margin reductions will accelerate into F2015 (down more than the 30bp in F2014), but management expects to offset it with cost control. Implied F2015 guidance for 10 percent+ EPS growth is in-line to modestly above $1.70 consensus. Given the lower growth profile we do not find the 25x P/E attractive."

Imperial - Outperform, $50 price target

"We continue to view the current valuation as an attractive long-term entry point into this high quality, differentiated premium retailer that continues to lead and gain share in the fastest growth segment in consumer staples - natural and organic."