BB&T Trims Whole Foods to 'Buy'

Analyst Andrew Wolf thinks the natural food grocery chain's earnings warning is overly conservative. He thinks the shares are fairly valued

BB&T Capital downgraded Whole Foods (WFMI ) to buy.

Analyst Andrew Wolf says earnings per share were below his estimate, and in line with the consensus estimate. He notes comp-store sales were below the forecast and Whole Foods' guidance. Wolf says he considers Whole Foods' guidance warning to be overly conservative, and he cut his estimates accordingly. He also trimmed the target to $57, from $60.

Wolf now forecasts $1.65 fiscal 2003 (Sep.) earnings per share, down from $1.70, and sees $2.00 fiscal 2004, down from $2.05. With the stock trading at about 30 times the calendar 2003 earnings per share forecast, he thinks the shares are fairly valued for a premier retail growth stock, which prompts his call to accumulate the stock on further price weakness.

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