Morgan Stanley starts coverage on supermarket names

Looking over the battered natural/organic growth group, Morgan Stanley buys the dip in Whole Foods (WFM +0.5%) and Sprouts (SFM +3%), initiating both at Overweight, but The Fresh Market (TFM -1.7%) is started at Underweight.

Plain-jane and red-hot The Kroger (KR +0.2%), meanwhile, also rates an Overweight rating.

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Comments (6)
  • MTMatt
    , contributor
    Comments (41) | Send Message
    Thinking the same. Just bought WFM yesterday at $38.95.
    25 Jun 2014, 11:16 AM Reply Like
  • myron d stechman
    , contributor
    Comments (14) | Send Message
    Never lost faith in whole foods.
    25 Jun 2014, 11:56 AM Reply Like
  • marksaxton
    , contributor
    Comments (10) | Send Message
    ..I see no backslide for Fresh Market, unless the attrition rate at the store level continues to have a neg impact on customer service....
    25 Jun 2014, 12:48 PM Reply Like
  • Wifeswaption
    , contributor
    Comments (32) | Send Message
    I own SFM calls that have doubled in a month. It is a great company and I have watched our local store become more and more busy since it opened. They are a cheaper alternative to WFM while maintaining a natural foods selection. With the country now realizing the increasing cost of healthcare they will pay more attention to their everyday health and the causes of our diseases in this country: the food we put in our mouth.
    25 Jun 2014, 09:39 PM Reply Like
  • Bogie 1
    , contributor
    Comments (145) | Send Message
    Brutal winters do a number on natural organic foods. Be careful. The folks that buy at whole foods and natural organically leave their areas for the summer vacation seasoning further dropping revenues. The se stores needed to merge with players with a plan when they were the rage. Instead lack of vision came back to bite them. Kroger has and had a plan, is all weather, good management and is consistent. The rest are fad stores that will go the way of other fads IMHO.
    26 Jun 2014, 06:15 AM Reply Like
  • Wifeswaption
    , contributor
    Comments (32) | Send Message
    Interesting analysis. I see the customers of SFM as regular people, one reason why I dont consider them direct competition with WFM but rather driving new customer sales. I also believe this was proven with the last WFM earnings call which dragged SFM down only to see it bounce with its own earnings. As for the fad comment, I believe eating healthy is not a fad but rather a change in lifestyle, much like the move away from smoking by the general public. My household will never go back to mass market grocery store shopping again. Being healthy isnt really a fad once you realize how you feel everyday. If it is a fad, invest in funeral homes because Americans are the most unhealthy western people.
    26 Jun 2014, 06:34 PM Reply Like
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