Shares of Whole Foods Market Inc. ran up 5.1% in morning trade Wednesday, after Credit Suisse turned bullish on the specialty grocery store chain, citing an attractive risk-versus-reward scenario for investors. Analyst Edward Kelly raised his rating to outperform, after being at neutral since July 31, 2013. He raised his stock price target to $40, which is 18% above current levels, from $30. Kelly said Whole Foods has gone on the offensive by cutting prices, accelerating private brand sales through the rollout of 365 stores, cutting costs, increasing marketing and investing in technology. He said he believes same-store sales are near a bottom, and means the downside to the stock price, which has lost about half its value from its October 2013 record close of $65.24, should be limited. “We see a unique opportunity to own this leading specialty food player while still in the early stages of a repositioning that should reinvigorate growth,” Kelly wrote in a note to clients. “A 50% drop in the stock from its peak provides an attractive entry point.”
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News