Analyst Sean Naughton of Piper Jaffray provided his insights on Whole Foods Market, Inc. (NASDAQ:WFM) after the company reported 3Q earnings. Thee analyst expressed specific concerns regarding falling traffic, pointing to a ramp up in promotions, lower prices, and advertising. He states, “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.”
The analyst also describes competition as another challenge for the company. He states, “We continue to believe WFM is one of the best experiential food retailers, but competition has clearly closed the gap at a lower price.” The analyst has high hopes for the company’s long term potential though believes the company must first address near term woes.
The analyst reiterates a Neutral rating on the company and raised his price target from $29 to $30.
According to TipRanks, Sean Naughton has a 58% success rate recommending stocks with an average return of 5.5% per recommendation.