BMO Capital Says United Natural Foods (UNFI) Sell-Off 'Perplexing', Buy on Weakness

February 27, 2013 7:30 AM EST Send to a Friend
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Price: $76.67 -0.6%

Rating Summary:
    10 Buy, 6 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 14 | Down: 28 | New: 51
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BMO Capital reiterated its Outperform rating and $70 price target on United Natural Foods (NASDAQ: UNFI) saying yesterday's nearly 5% sell-off was perplexing and creates a buying opportunity.

Analyst Karen Short notes 5 reasons why: "1) the reduced FY13 guidance is entirely a function of greater-thanexpected costs associated with the Auburn strike, 2) the company clearly indicated sales trends (excluding the lapping of the Safeway contract) remained robust, or – more specifically – had not slowed, 3) operating margins once again expanded in 2Q13, 4) the company will likely be back on track to roll out the new warehouse management system to at least two facilities per year in FY14 and beyond, and 5) gross margins appear to be on the cusp of improving given the benefits of the TMS, and resolution of supply shortages."

The firm sees 3Q13 and FY13 EPS are $0.66 and $2.23. Consensus is $0.64 and $2.21.

For an analyst ratings summary and ratings history on United Natural Foods click here. For more ratings news on United Natural Foods click here.

Shares of United Natural Foods closed at $50.45 yesterday.


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