Sell Whole Foods Ahead Of Earnings - Goldman
Feb. 6, 2017 5:03 AM ET|About: Whole Foods Market, Inc. (WFM)|By: SA Eli Hoffmann, SA News Editor
Goldman suggests investors Sell shares of Whole Foods (NASDAQ:WFM) ahead of earnings (Wed. Feb. 8 AMC).
Firm notes WFM's stock price recently began bucking the downward trend in consensus forecasts, suggesting optimism around potential tax-code change benefits. Thinks WFM's share price is extended, and should "grind steadily lower" with each passing quarter.
Says WFM is most at risk among grocers from meal replacement companies and Amazon Fresh, noting 47% of its base is located areas that have Amazon Fresh or Fresh Direct deliveries.
Says Trader Joe's, SFM, Costco and KR are all growing faster than WFM in its core business of natural and organic, and as a group offer better value and convenience.
Says WFM is "growing stores but not earnings," noting declining SSS and gross margin, while the company continues to repurchase shares.
Price target of $24 implies 19% downside.
Now read: Why Whole Foods Market Is A Good Bet »