Pressure on profit margins at Whole Foods Market (WFMI) has driven its stock to 32.64plus or minus—near its March low of 29.99—down from 53 last October. Its purchase of organic-food retailer Wild Oats Markets in 2007 and new-store openings jacked up costs. But some analysts see sales jumping 28% in the year ending Sept. 30, to $8.5 billion. Sales growth in the "U.S. natural and organic food industry remains strong," notes Mark Miller of investment firm William Blair, who rates the stock outperform. Edward Aaron of RBC Capital Markets also tags Whole Foods outperform, based on its "superior growth prospects." He sees potential for an upturn as the company integrates Wild Oats, which runs 109 stores in 23 states, into its operations. "High-quality management" and stable cash-flow generation are positives, Miller adds.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

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