Story updated at 9:45 a.m. to reflect market activity.
Whole Foods gained 0.8% to $52.78 in morning trading.
The analyst firm set a price target of $63 for the company, above its Thursday closing price of $52.35. Analyst Rupesh Parikh wrote that Whole Foods "is the long-standing leader in the specialty grocery sector and we believe best positioned to gain share in the rapidly growing natural/organics category."
Separately, 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 a few notable strengths, 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, growth in earnings per share, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 9.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WFM's debt-to-equity ratio is very low at 0.01 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 1.17, which illustrates the ability to avoid short-term cash problems.
- WHOLE FOODS MARKET INC has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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 ($1.62 versus $1.47).
- 37.65% is the gross profit margin for WHOLE FOODS MARKET INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 3.72% is above that of the industry average.
- Net operating cash flow has increased to $337.00 million or 11.22% when compared to the same quarter last year. In addition, WHOLE FOODS MARKET INC has also vastly surpassed the industry average cash flow growth rate of -50.65%.
- You can view the full analysis from the report here: WFM Ratings Report