Prudential downgraded Wild Oats Markets (OATS ) to neutral from overweight, explaining that the stock's valuation isn't "conducive to near-term outperformance."
Analyst Robert Campagnino sees no compelling reason to boost his 3 cents 2005 earnings per share estimate, 22 cents 2006 estimates, or his $13 price target on the stock. In March, he had cited three main reasons for his upgrade of Wild Oats: improving sales trends, workable valuation, and favorable trends in the natural and organic segment. He says the sales trends remain healthy for both the company and food retail industry, but he doesn't think Wild Oats' current valuation is conducive to near-term outperformance. The stock currently trades at around $11.66 per share, compared to under $9 in 2004.