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Davenport Initiates Coverage on United Natural Foods (UNFI) with a Buy; Confidence in Strength of Company

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October 15, 2009 11:09 AM EDT

Davenport initiates coverage on United Natural Foods (NASDAQ: UNFI) with a Buy. Price target $32.
Davenport analyst says, "We recommend purchase of United Natural Foods, reflecting our confidence in the strength of the company, its management team, cost savings potential, and its consistent financial performance. Additionally, UNFI has a strong balance sheet and should generate consistent free cash flow. In the near term, we expect sales will remain tempered until both the consumer and the economy improve. We believe organic will continue to be a key trend within the food segment and expect it to return to a high-single digit to low-double digit growth rate over the long-term. UNFI boasts a portfolio of leading brands and has a strong market presence. We believe the company, as the leader in the distribution of organic products, should benefit from the growth potential of the category, consolidation possibilities, and its ability to supply both organic and specialty products. The company continues to innovate and knows its customer base very well."

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United Natural Foods, Inc., together with its subsidiaries, distributes natural, organic, and specialty foods, as well as non-food products in the United States.