Bank of America Merrill Lynch on Friday slashed its 12-month price target for Whole Foods by 26 percent to $25 from $34, telling clients to sell the stock on shrinking margins and increased competition.
"We are downgrading WFM from neutral to underperform as we see increased risks to WFM's comp and margin outlook from a more challenging operating environment," wrote equity analyst Robert Ohmes. "We also believe WFM's multiple will re-rate lower as comps and margins continue to come under pressure."
In the past year, shares of Whole Foods have whipsawed, stuck in a trading range between $35 and $28. The stock currently sits at around $28, down 15 percent in 2016.