Goldman Sachs Loves Whole Foods Market (WFM) While It Hates Traditional Grocers

As Goldman Sachs downgraded both Kroger (NYSE: KR) and Safeway Inc. (NYSE: SWY) to Sell today, the firm reiterated its Conviction Buy List rating on Whole Foods Market, Inc. (NYSE: WFM).

Goldman's analyst said Whole Foods Q3 results demonstrate sustained momentum. They said although shares trade at a sharp premium to the group, the valuation is sustainable as the company continues to see an improvements in comps.

"The corresponding double-digit EPS growth from accelerating store expansion and continued market share gains in existing stores should drive stock outperformance," they said.

The firm downgraded the two traditional grocers to Sell saying they advocate leaning into secular stories with accelerating fundamentals like WFM and out of mature, share donors as cyclical tailwinds moderate.

Shares of Whole Foods Market are up 0.8% in early action Monday, while Kroger and Safeway are both lower.

For more ratings news on Whole Foods Market click here and for the rating history of Whole Foods Market click here.

Shares of Whole Foods Market closed at $66.13 yesterday.

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