Morgan Stanley and BMO analysts downgraded several grocery stocks today, causing their stock values to recede substantially. Morgan Stanley downgraded both SUPERVALU INC (NYSE: SVU) and Safeway Inc (NYSE: SWY), while BMO downgraded Whole Foods Market Inc (NASDAQ: WFMI).
Losses in the sector weren’t restricted to just those downgraded positions. Market reaction stretched across the sector, affecting companies like Ruddick Corp (NYSE: RDK), Fresh Market Inc (NASDAQ: TFM) and Casey S General Stores Inc (NASDAQ: CASY).
The downgrades that started this mass exodus were caused by the anticipation of below-average earnings, losses in customer traffic, concerns of inflationary pressure, and price competition from discount stores.
Many bloggers and analysts, like those at Zacks, appear not on board with this assessment, at least as it relates to WFMI. Just today, Zacks released an article that it was holding its Outperform rating and short-term hold recommendation on WFMI.
*Quotes and charts courtesy of Yahoo Finance.
