Whole Foods stock soars after trading was temporarily halted
- Author: Zachary Reyes Jun 17, 2017,
Jun 17, 2017, 3:54
Royal Bank of Canada lifted their target price on shares of Whole Foods Market from $35.00 to $42.00 and gave the stock an "outperform" rating in a report on Thursday, April 27th. For Amazon, this deal will allow the retailer known primarily for its e-commerce offerings to continue its ongoing exploration into brick and mortar retail, as well as its persistent focus on grocery.
"The conventional grocery store should feel threatened and incapable of responding", Pachter said.
Moody's lead retail analyst Charlie O'Shea said the deal could be "transformative, not just for food retail, but for retail in general". On Friday, WalMart announced it is buying men's online clothing retailer Bonobos for $310 million.
Amazon essentially plans to shake up this notion with sophisticated technology like artificial intelligence, computer vision, customer profiling, and drone delivery systems. And Amazon now has a partner in delivering perishable groceries, which has been a weakness for the online delivery giant, he said.
"They're greedy bastards, and they're putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods", Mackey told Texas Monthly in a profile published this week".
As sales have slumped, Whole Foods executives have tried to highlight what distinguishes it from rivals. Once activist investors Jana Partners took a stake in Whole Foods earlier this year with an eye on a sale, the wheels for such a deal were apparently set in motion, leading to Friday's development. Amazon and Whole Foods are both climbing, and energy companies are rising as the price of oil moves higher.
Today marks the beginning of an exciting new chapter in Whole Foods Market's history with the announcement that we've entered into an agreement to merge with Amazon. Shoppers skip the checkout line, and their Amazon accounts get automatically charged. A murkier question appears to be what Amazon can do for Whole Foods.
The online giant previous year declared its plans to open a physical grocery store called Amazon Go, a market without cashiers where consumers would be automatically charged based on the items they placed into their shopping bags.
Whole Foods put its efforts toward lowering its prices compared with rivals like Kroger. In an email to customers, the company said it planned to maintain the same standards under Amazon, including bans on artificial flavors and colors.
The purchase in one fell swoop gives Amazon, which until now has operated nearly entirely on the internet, a big presence in the brick-and-mortar world on Main Street, with more than 450 stores in the US, Canada and Britain.
"This might be an opportunity for consumers who have felt that Whole Foods is inaccessible", said Lauren Beitelspacher, a marketing professor at Babson College in MA. Whole Foods Market's dividend payout ratio (DPR) is presently 44.44%.
Amazon is making a big bet on physical stores and the business of food. This could be through lower prices, an enhanced in-store experience or upgrading Whole Foods' delivery service. In its first successful demonstration, Amazon delivery drone was only able to fly two miles.
News of the deal sent shares of traditional retailers like Walmart, Target, Costco and Kroger tumbling as much as 13 percent as investors tried to digest the implications of an Amazon-backed grocery chain.