Barron’s newspaper has predicted a surge in Whole Food Market’s shares. The supermarket chain is aggressively foraying into new areas and closing the price gap, of its produce, with its rivals. Investors though should study the company’s fundamentals before investing their hard earned money into it.
According to Barron, a financial centric newspaper, the share of Whole Foods Market Inc., an upscale supermarket chain, is likely to see upward movement in the coming years due to increased competitive price cutting which can take place due to the coming of effect of cost cutting measures the supermarket chain had undertaken earlier. Simultaneously, Whole Foods Market has also launched a new chain of smaller stores and have stocked them with value-added benefits.
According to the June 6 edition of Barron, although the results may take several quarters to show, the value of the shares could have yields as high as 20% over the next years. This includes yields from dividend.
In the current and the subsequent quarter, same-store sales are expected to diminish slowly with Whole Foods closing in on the price gap with its rivals.
Currently Whole Foods Market has 365 value chain, it eventually hopes to have 1,200 of them. Last month it launched one of its stores in Los Angeles.
Earlier this month, its shares surged ahead as Credit Cruise raised it rating as well as the price target of its stocks.
Barron has forecast Whole Food Market’s share to hover around $40 by next year. On Friday, it closed at $34.07 and was down by 0.7%.
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