Visa, Whole Foods, Deutsche: Ratings Changes

Visa, Whole Foods Market and Deutsche Bank were upgraded by TheStreet's stock model.
By Jake Lynch ,

BOSTON (TheStreet) -- Here are three important ratings changes from TheStreet's quantitative stock model, which evaluates fundamentals and performance.

3.

The model upgraded food retailer

Whole Foods Market

(WFMI)

to "buy."

Quarter

: Fiscal first-quarter profit increased 71% to $55 million, or 32 cents a share, as revenue gained 7% to $2.6 billion. The operating margin inched up from 3.2% to 3.9%. Whole Foods Market holds $570 million of cash and $734 million of debt.

Stock

: Whole Foods Market has soared 133% in the past year, outperforming major U.S. indices. The stock trades at a PEG ratio, a measure of value relative to expected long-term growth, of 0.8. A PEG ratio below 1 signifies cheap shares.

Consensus

: Of analysts covering Whole Foods Market, five advise purchasing shares, 14 recommend holding and one suggests selling them.

RBC Capital Markets

expects the stock to advance 9% to $39.

JPMorgan

is also bullish on the stock.

2.

The model upgraded European investment bank

Deutsche Bank

(DB) - Get Report

to "hold."

Quarter

: Deutsche swung to a fourth-quarter profit of $1.8 billion, or $2.69, from a loss of $6.7 billion, or $12.14, a year earlier. Revenue grew 32% to $10 billion. Margins climbed into positive territory. A 6.3 debt-to-equity ratio reflects excessive leverage.

Stock

: Deutsche Bank has nearly doubled in the past 12 months, outpacing benchmarks. The stock sells for a price-to-projected-earnings ratio of 12 and a price-to-book ratio of 0.9, 37% and 55% discounts to peer-group averages.

Consensus

: Of firms following Deutsche Bank, 25, or 52%, rate its stock "buy", 18 rate it "hold" and five rank it "sell."

MF Global

projects a share price of $114, implying a 55% upside.

Keefe, Bruyette & Woods

expects the stock to outperform.

1.

The model upgraded credit-card company

Visa

(V) - Get Report

to "buy."

Quarter

: Fiscal first-quarter profit rose 33% to $763 million, or 75 cents, as revenue expanded 13% to $2 billion. Visa's operating margin extended from 57% to 60%. Its balance sheet stores $6.5 billion of cash and $53 million of debt.

Stock

: Visa has returned 70% in the past year, outpacing U.S. indices. The stock trades at a price-to-book ratio of 2.8, a 58% discount to the industry average. The shares are costly based on trailing earnings, projected earnings, sales and cash flow.

Consensus

: Of analysts covering Visa, 30, or 81%, advocate purchasing the shares and seven suggest holding them.

Janney Montgomery Scott

projects the stock will advance 41% to $125.

Piper Jaffray

and

Morgan Stanley

are also bullish.

-- Reported by Jake Lynch in Boston.

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