Whole Foods Shakes Up Its Board, Calls In The 'A-Team'

Whole Foods Market, Inc. WFM's changes to its executive team and 2020 guidance is receiving a mixed reaction from Wall Street.

Analysts at Credit Suisse argued that Whole Foods' new changes aren't perfect but good enough to help the stock. Analysts at Deutsche Bank are taking a different view and think its management team is "the 'A' team."

Deutsche Bank's Shane Higgins maintained a Hold rating on Whole Foods' stock with a price target raised from $28 to $38. The analyst justified his price target after the company added five "highly qualified" directors with "extensive relevant leadership experience."

Higgins said the directors will also bring to the table "valuable insight" so that Whole Foods can execute on its strategy moving forward. All together, the company is now in a better position to accelerate key initiatives, including affinity, category management and cost savings.

Why The Hold Rating?

Despite boasting an 'A' team, Higgins isn't ready to change his stance on Whole Foods' stock to a bullish rating. The analyst explained that he needs to see "some greater evidence" the company can drive traffic, comps and earnings growth at a time when the competitive environment remains challenging.

The analyst argued Whole Foods' 2020 guidance appears "aggressive" and a "challenge" to achieve, again due to the competitive nature of the industry.

See Also:

How Whole Foods Went From Undervalued To Overvalued

Of The Potential Paths Forward For Whole Foods, A Takeout Seems Most Likely