Whole Foods (WFM) Sentiment Can Improve w/o 365 - RBC

RBC analyst, William Kirk, believes sentiment can shift for Whole Foods Market (NASDAQ: WFM) even if numbers do not improve from the 365 initiative. No change to Outperform or $37 PT.

365 by Whole Foods Market will not be a meaningful, near-term contributor to numbers. That said, the analyst believes the grand openings have the ability to shift the narrative toward incremental growth and start a sentiment swing. Looking at Whole Foods' first store opening in NYC (Chelsea Feb-2001), the analyst found valuation significantly improved on an absolute and relative basis, despite comp performance largely unchanged.

On February 15, 2001, Whole Foods opened its first store in NYC. At the time, shares traded at ~20x on NTM PE and ~7.5x on EV/NTM EBITDA and comp growth was ~9.5%. A year later, despite no market multiple expansion and no change to comp growth (~10%), Whole Foods traded at 29x NTM PE and 10x EV/NTM EBITDA.

For an analyst ratings summary and ratings history on Whole Foods Market click here. For more ratings news on Whole Foods Market click here.

Shares of Whole Foods Market closed at $29.90 yesterday.

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