Oppenheimer analyst Rupesh Parikh sees additional upside for Whole Foods Market, Inc. WFM after news broke Friday morning of its acquisition by Amazon.com, Inc. AMZN. Parikh maintains his Outperform rating and lifted his price target to $45.
“Last month, we highlighted a 50 percent probability for a takeout, and this is one of the outcomes that has materialized,” Parikh said. “We overall view a takeout value of $42 as undervaluing the company’s prospects and the powerful brand. In a takeout scenario, we estimated a value in the mid-$40’s range, so it appears there is some money being left on the table.”
Another Bid For Whole Foods?
Parikh would not rule this possibility out given Whole Food’s strong management team and brand. He sees a potential bid resulting from a defensive measure to keep Jeff Bezos out of the grocery industry.
At time of publication, Whole Foods was up 29.84 percent at $42.92.
Related Links: Amazon's Acquisition Of Whole Foods Should Create Lower Prices, Offer Better Consumer Experience Sprouts Farmers: Buy The Dip, This Could Be The Next Takeout Target
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