The security's earnings beat came accompanied by news of CEO Steven Spinner's retirement
The shares of United Natural Foods Inc (NYSE:UNFI) are down 11.6% at $16.96 this morning, even after the food wholesaler reported fiscal fourth-quarter profits of $1.06 per share, notably higher than Wall Street's estimated $0.74 per share, as well as a revenue beat. However, the company also announced that CEO Steven Spinner, who increased sales to over $26 billion from $3 billion during his 12-year tenure, will retire as soon as July 2021, and join United Natural Foods' board as executive chairman once his successor is appointed.
On the charts, the equity has been middling since a pullback from its early summer peak. And while shares are much better off from the stock's mid-March, 20-year low near the $5 mark, the formerly supportive 50-day moving average is keeping a tight lid on the security. Plus, UNFI is set to close north of its 120-day moving average for the first time since late March. Despite these obstacles, however, the equity is up 93.8% year-to-date.
Analysts are hesitant towards the security, with seven of the nine in coverage carrying a tepid "hold" rating, and the remaining three sporting a "strong buy." Meanwhile, the 12-month consensus price target of $23.25 is a whopping 36.9% premium to current levels, meaning price-target cuts could be on the horizon.
Digging deeper, short sellers have been building their positions, too. Short interest is up 2.5% in the last two reporting periods, and the 10.17 million shares sold short make up a substantial 19.3% of the stock's available float. In other words, it would take over a week to buy back these bearish bets, at the security's average pace of trading.
That negative sentiment is not reflected in the options pits, however, where calls are all the rage. UNFI sports a 50-day call/put volume ratio of 20.82 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 99th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.
This optimism still rings true today. At last check, 7,816 calls have crossed the tape, which is six times the average intraday amount, and more than three times the number of puts traded. Most popular is the monthly October 20 call, followed by the monthly November 15 call.