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All The Sell-Side Reactions To Whole Foods' Q4

All The Sell-Side Reactions To Whole Foods' Q4

Investors initially reacted positively to Whole Foods Market, Inc. (NASDAQ: WFM)'s fourth-quarter results and the stock traded as high as $30.06 on Thursday. However, selling pressure resulted in the stock giving up all of its daily gains and closing lower by 0.18 percent on the day at $28.46.

Here is a summary of what major sell-side research firms had to say about the organic grocer's quarterly results.


Christopher Mandeville of Jefferies maintains a Hold rating and $31 price target on Whole Foods' stock.

The analyst highlighted that while the company did report better-than-expected earnings per share and 2017 guidance was better than expected, return on invested capital is set to decline again in the coming year.

Mandeville also noted that Whole Foods' comps continue to lack "good visibility."


William Kirk of RBC Capital Management maintains an Outperform rating and $37 price target on Whole Foods' stock.

Kirk's continued bullish stance on Whole Foods stems from encouraging initiatives such as investing in price and the continued rollout of the smaller store format, 365.

The analyst suggested that Whole Foods is also in a unique position as its peers aren't necessarily stealing its existing customers or preventing it from gaining new customers.

Deutsche Bank

Shane Higgins of Deutsche Bank maintained a Hold rating on Whole Foods' stock with a price target lowered to $29 from a previous $32.

According to the analyst, Whole Foods' fourth quarter fell short of his expectations in terms of traffic and comps. While a sequential improvement was seen in the first five weeks of the new quarter, comps on a two-year stack continued to decline.

Credit Suisse

Edward Kelly of Credit Suisse maintains an Outperform rating on Whole Foods' stock with an unchanged $40 price target.

According to Kelly, Whole Foods' fourth-quarter report could "spark interest" from investors looking to profit on a turnaround story. The analyst believes that at this point, the company's comps likely bottomed and ongoing cost cutting initiatives could boost the company's outlook.

On the other hand, Kelly did caution that turnaround stories in the food and retail sector are "never clean and Whole Foods is unlikely to be any different."


Kelly Bania of BMO Capital Markets maintains an Underperform rating on Whole Foods' stock with an unchanged $23 price target.

Bania highlighted several positive developments in the quarter, including an improvement in items/basket, quarter-to-date comps, a "more confident tone" coming from management, the upcoming national launch of a loyalty program and progress in a cost savings plan, among others.

On the other hand, the analyst highlighted several concerning and worrisome trends such as declining traffic on a one- and two-year basis, stabilization of comps remain slower than expected, improvements in item/basket are not necessarily a reflection of value and marketing efforts, among others.

At last check, Whole Foods was down 1.41 in Friday's pre-market, trading at $28.06.

Latest Ratings for WFM

Aug 2017BarclaysDowngradesOverweightEqual-Weight
Aug 2017Tigress FinancialDowngradesBuyNeutral
Jul 2017Wells FargoDowngradesOutperformMarket Perform

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