Piper Jaffray Remains Sidelined on Whole Foods Market (WFM) as Traffic Continues to Decline
Piper Jaffray reiterated a Neutral rating on Whole Foods Market (NASDAQ: WFM), and raised the price target to $30.00 (from $29.00), following the company's 3Q earnings report. Piper remains confused about why the company's transaction counts continue to fall despite accelerated promotions, more advertising, more every day low prices and a stronger consumer overall.
Analyst Sean Naughton commented, "We are surprised at the level of traffic declines (down 2.7% in the current quarter) that we continue to see at Whole Foods despite the company's value efforts. We would note traffic has been negative for 4 consecutive quarters and the start to the current quarter remains negative. In addition, we note the 2YR trend continues to fall. We continue to believe WFM is one of the best experiential food retailers, but competition has clearly closed the gap at a lower price. Overall, we could potentially get more constructive on the stock if valuation improved as we think fundamentals may be near trough, but for now we remain Neutral."
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Shares of Whole Foods Market closed at $33.64 yesterday.