BMO Capital Markets, upon bank’s Dirty Dozen Survey, downgraded Whole Foods Market Inc. to ‘underform’ from ‘market perform’ – after keen observing the grocer’s price to have had not improved. Furthermore, the cost target was lowered from US$ 26 to US$ 23.
“Our bullish BMY thesis has mostly materialized.” – Bristol-Myers Squibb analyst, Alex Arfaei
As per analysts’ opinion, Whole Foods Market Inc. is viewed as innovation leader in food retail but might face complications in its stock valuation due to its prominence in initial stages of multiyear transition.
In addition to this, the company unveiled a nine-point turnaround in November. Around 71% among more than 1000 active Whole Foods shoppers – the ones who took part in BMO Dirty Dozen Survey – saw no cost modification over past three months.
The survey revealed a ratio of 24% believing Whole Food’s organic products to be better than those found at conventional markets. Similarly, 69% (more than 2/3) claimed to have had supplemented their grocery needs at traditional supermarkets.
MONDAY: A published note by analysts read as:
“With new competition across the retail landscape in both natural and organics, and more likely coming, we see increasing risk that Whole Foods will have to accelerate and broaden its price investments beyond current expectations to change consumer perception.”
Whole Foods Market might be investing more in price credential, but also look ahead to sustain its premium pricing in some categories by conveying its high quality standards, which could be really very risky.
According to MarketWatch: Whole Foods shares are bearish with approx. 3% in PREMARKET TRADING and down with approx. 42.8% for the past one year of timespan. Not to mention, the S&P is bearish with approx. 7% for the past 12 months, as well.
