Wells more bearish on United Natural Foods, downgrades to Underweight

As previously reported, Wells Fargo downgraded United Natural Foods to Underweight from Equal Weight with a $15 price target. The firm notes United Natural Foods has been a tough stock in 2023, but risk in this name remains with a tough industry backdrop. The company’s long-term strategy makes sense and there is plenty of room for improvement following a difficult 2023, but Wells would be a seller of the stock given weak industry backdrop problematic, as company is exposed to deflation and weakness in its conventional grocery customer; poor execution and low P&L visibility; unappealing leverage and free cash flow; and valuation that isn’t all that accommodating at 6.5-times EBITDA.