NEW YORK (TheStreet) -- Whole Foods Market (WFM - Get Report) shares are down -1.9% to $37.69 in trading on Thursday after its price target was cut to $34 from $38 by analysts at Cantor who also maintained their "sell" rating on the stock.
The firm believes that the healthy food grocer will experience execution challenges going forward and that its share price is currently too high.
TheStreet Ratings team rates WHOLE FOODS MARKET INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WHOLE FOODS MARKET INC (WFM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- WFM's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- WHOLE FOODS MARKET INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WHOLE FOODS MARKET INC increased its bottom line by earning $1.47 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $1.47).
- 38.47% is the gross profit margin for WHOLE FOODS MARKET INC which we consider to be strong. Regardless of WFM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WFM's net profit margin of 4.27% compares favorably to the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income has remained constant at $142.00 million when compared to the same quarter one year ago.
- You can view the full analysis from the report here: WFM Ratings Report