UPDATE: Goldman Sachs Upgrades The Fresh Market to Buy on Earnings and Store Growth

Goldman Sachs upgraded The Fresh Market

from Neutral to Buy and raised the price target from $57.00 to $60.00. Goldman Sachs said, "Our upgrade is based on: (1) 20%+ earnings power driven by best-in-class returns and the opportunity to more than triple the store base, (2) continued opportunity for operating margin expansion, and (3) attractive valuation relative to growth/returns and peers at 28X NTM EPS (vs. the historical average of 35X). While we are lowering our FY14 EPS estimate to $2.00 from $2.04 to factor in less SG&A leverage from healthcare reform, the embedded 22% EPS growth is still reflective of an early stage growth stock yet TFM's valuation is at a discount to peers." The Fresh Market closed at $46.47 on Friday.