Wedbush upgraded Natural Grocers (NYSE: NGVC) from Underperform to Neutral with a price target of $24.00 (from $22.00), saying near-term downside is limited although the long-term outlook remains questionable.

Analyst Phil Terpolilli commented, "We are raising our price target to $24 (up $2) and moving to NEUTRAL. We believe NGVC’s recent marketing hire and step up in marketing efforts are encouraging, and should provide near-term floor to shares. Longerterm, the company continues to facing an accelerating marketing campaign from WFM in FY15 as well as conventional peers. Our principal long-term concerns are unchanged that a) higher-brand equity peers will place pressure on NGVC in overlapping markets via price investments, b) increased dry grocery and supplement offerings in alternative channels may pressure NGVC, and c) increased organic offerings at specialty peers such as SFM pose a risk."

The firm raised FY 2015 EPS from $0.68 to $0.73 and FY 2016 EPS from $0.79 to $0.86.

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Shares of Natural Grocers closed at $25.66 yesterday.