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Wall Street’s Take on Whole Foods ahead of Fiscal 3Q17

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Wall Street’s recommendations on Whole Foods

Whole Foods Market (WFM) is covered by 24 Wall Street analysts. The company has a rating of 3 on a scale of 1 (“strong buy”) to 5 (“sell”).

A total of 83% of analysts have recommended “holds” on WFM stock, and 13% have recommended “buys.” Only 4% call WFM a “sell.”

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Loop Capital, Gordon Haskett, and Pivotal Research Group are among the brokers that recommend “holds” on WFM, while Barclays and Wells Fargo have suggested “buys.”

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Target price

Whole Foods currently has an average target price of $38.89, which indicates a downside of 7% from its current price. Individual target prices on the company range from $19.00 to $48.00.

Recent updates on Whole Foods

Whole Foods has undergone a host of recommendation revisions since Amazon’s acquisition announcement. On July 11, Wells Fargo lowered WFM from an “outperform” to a “market perform” rating.

UBS raised WFM to a “neutral” from a “sell” rating on July 10, citing Amazon’s planned acquisition as a positive.

On June 28, Oppenheimer cut Whole Foods from an “outperform” to a “market perform” rating, stating that a new bid on Whole Foods would be unlikely.

On June 18, BMO Capital raised WFM to a “market perform” from an “underperform” rating, citing Amazon’s acquisition as the key catalyst.

ETF investors seeking to add exposure to Whole Foods can consider the First Trust Consumer Staples AlphaDEX ETF (FXG), which holds 4.7% of its portfolio in the company.

Peer comparison

Whole Foods has close to the worst rating among its retail food peers. Sprouts Farmers Market (SFM), Kroger (KR), and Walmart (WMT) have ratings of 2.2, 2.6, and 2.6, respectively.

While Kroger and Walmart have 36% “buy” ratings, Sprouts has received “buy” ratings from 52% of analysts.

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