United Natural Foods Shares Dive Lower As Tigress Downgrades To Neutral

United Natural Foods, Inc. UNFI shares fell 1.77 percent  on Wednesday after Tigress Financial Partners downgraded the company from Buy to Neutral.

United Natural Foods' Q2 results missed its bottom line and weak 2016 guidance resulted in selling pressure.

"UNFI has thrived in a niche environment but is now experiencing issues related to competition and pricing as organic and natural foods become more mainstream. While we remain optimistic on UNFI's long term outlook, we view 2016 as a transition year for the company and expect continued margin pressure as a result of competitive concerns," Tigress noted.

United Natural foods is lacking the immediate growth catalysts that would drive future shareholder value and economic profit growth.

Tigress also forecasts headwinds related to foreign exchange persisting for the company over the next year. The firm believes it will put pressure on United Natural Foods's ability to grow its top line.

"We see productivity gains as being limited from this point forward and do not expect to see the kind of margin expansion the company delivered over the last twelve months. Furthermore, we believe that INGR is overvalued at current levels and that the combination of high valuation and subpar Business Performance metrics makes us cautious on the shares," the firm commented.

The stock closed at $41.03, down 0.6 percent.