UBS Gets Bullish on Whole Foods, Bearish on Safeway (WFM, SWY)

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Analysts at UBS on Tuesday offered sharply diverging opinions on supermarket operators Whole Foods Market, Inc. ( WFM ) and Safeway Inc. ( SWY ).

The firm initiated coverage on WFM with a "Buy" rating and $100 price target, which suggests a 19% upside to the stock's Monday closing price of $83.80. UBS noted the company's various growth drivers are to this point unappreciated by Wall Street consensus estimates and valuation.

Meanwhile, UBS started coverage on SWY with a "Sell" rating and $20 price target. That target implies an 8.5% downside to the stock's Monday closing price of $21.85. UBS justified the negative view by stating the company is simply not investing enough in its core business.

Whole Foods shares rose 70 cents, or +0.8%, in premarket trading Tuesday, while Safeway shares were mostly flat.

The Bottom Line
Shares of Whole Foods ( WFM ) have a .67% dividend yield, based on last night's closing stock price of $83.80. The stock has technical support in the $77-$80 price area. The shares are trading near all-time highs. Shares of Safeway ( SWY ) have a 2.65% dividend yield, based on last night's closing stock price of $21.85. The stock has technical support in the $18-$20 price area. If the shares can firm up, we see overhead resistance around the $23 price level.

Whole Foods Market, Inc. ( WFM ) and Safeway Inc. ( SWY ) are both currently rated "Neutral" by Dividend.com.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: SWY , WFM

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