UPDATE: Goldman Sachs Downgrades The Fresh Market Following Disappointing 3Q Results

In a report published Tuesday, Goldman Sachs analyst Stephen Grambling downgraded the rating on The Fresh Market (NASDAQ: TFM) from Buy to Neutral, and lowered the price target from $59.00 to $43.00.

In the report, Goldman Sachs noted, “We are downgrading TFM to Neutral from Buy following disappointing 3Q results. Our initial thesis had hinged on TFM seeing a multiple re-rating back to historical levels as new store productivity concerns proved temporary and the company demonstrated it could still grow EPS 20%+. However, we now believe TFM's expansion into more competitive markets will weigh on results and rising costs could further pressure ROIC. As such, we expect the current multiple compression to persist, leaving more limited upside, which drives our Neutral rating. Since adding TFM to the Buy list on February 18, 2013, the shares are -14% vs. the S&P 500 +19%.”

The Fresh Market closed on Monday at $39.97.