June 19, 2017 / 2:33 PM / a year ago

BUZZ-Whole Foods up as Barclays, BMO upgrade

** Whole Foods Markets adding on about 2 pct early Mon after jumping nearly 30 pct on Fri following Amazon.com’s announced $13.7 bln purchase; Barclays, BMO upgrade views on the up-market grocer

** Barclays upgrades to overweight from neutral, raises PT 26 pct to $48 from $38

** BMO raises WFM to market perform from underperform, hikes PT to $42 from $30

** Barclays analyst Karen Short sees the grocery space “altered dramatically” with AMZN’s bid, views risk/reward favorably and “would not be surprised in there is a bidding war” for WFM

** According to Short, most food retailers that compete with AMZN have “too much to lose not to bid”; cites Kroger, Target and Wal-Mart among potential universe of bidders

** BMO’s Kelly Bania agrees the deal has “far-reaching consequences”; adds that WFM’s challenging stand-alone outlook was drastically changed as AMZN makes WFM more competitive with respect to both pricing and technology

** Of 24 analyst covering WFM, 7 rate it “buy” or stronger, with 15 recommending “hold” and 2 “sell”

** WFM shares now trade at a ~3.5 pct premium to AMZN’s $42/share offer price

** Meanwhile, shares of food producers, payment processors, shopping malls as well as non-traditional food retailers like WMT and TGT lost at least $35 billion on news of the deal Fri (Stephen Culp)

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