UBS initiated coverage of Whole Foods with a sell rating, citing increased competition in the organic and natural food space.
"While Whole Foods has done so much to inspire, create, and revolutionize the market for natural and organic, we now see it being the victim of its own success," analyst Michael Lasser said in a note on Thursday. "We don't think the shares have properly reflected that the days of the company generating double-digit sales and EPS growth are likely over, at least for the foreseeable future."
Lasser said 42 percent of Whole Foods stores are within a five-minute drive of a Trader Joe's, and 12 percent are within a short drive to Sprout Farmer's Market.
"WFM has started to lose pricing power. Our Los Angeles-area pricing study of 50 items suggests WFM's prices are ~13% more expensive than Ralph's (Kroger) & Sprouts, on average," he wrote.
Shares of the supermarket company were down 2 percent premarket on Thursday.
Whole Foods shares 5-day performance