Wall Street Changed Its Stance on Food Retailers in 2017



Wall Street’s take changed on Walmart

Food retailers had a difficult run in 2017. Companies struggled with the cut-throat and persistent competition. However, industry leader Walmart (WMT) emerged as a clear winner in the price war. It even beat dollar stores and became the cheapest retailer in the country.

The company was successful not only in the brick and mortar space, but it also entered Amazon’s turf and snatched away the online juggernaut’s market share. The retailing giant recorded a 60% jump in online sales during 2017. Walmart’s success was closely mirrored by its stock price. The company gained 42% during 2017. The retailing giant’s ratings also improved throughout the year. Now, the company is rated a 2.3—compared to a 2.8 at the beginning of the year.

Ratings are done on a scale of 1 (strong buy) to 5 (sell).

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Kroger’s ratings changed in 2017

Kroger (KR) had several ups and downs during the year. Kroger had a 2.2 rating at the beginning of the year. It deteriorated to a 2.7 rating by September and finally settled at a 2.4 rating.

Sprouts Farmers Market’s ratings

Sprouts Farmers Market (SFM) has better ratings than its competitors discussed above. Currently, it’s rated a 2.1. It was rated a 2.1 at the beginning of the year, although the ratings deteriorated to 2.3 in August.

Analysts’ ratings for Supervalu

Supervalu’s (SVU) ratings improved from a 2.6 in January to a 2.4 in August. Analysts thought that the company was being penalized after the Amazon (AMZN) and Whole Foods deal. However, pessimism surrounded the stock again and its ratings fell to 2.8 by the end of December. Northcoast Research downgraded Supervalu from a “buy” to a “neutral” rating in October. Northcoast Research stated that waning revenue from the Albertson’s service agreement was the main concern.

However, Supervalu stock has the best upside among the food retailers discussed above.

Next, we’ll discuss Wall Street’s recommendations and target prices for the respective companies.


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