Whole Foods shares hit new year high on 3Q results

PORTLAND, Ore. (AP) — Shares of Whole Foods Market Inc. soared Wednesday after the organic grocery chain reported better-than-expected growth in its third-quarter profit and raised its full-year expectations.

The Austin, Texas-based company reported after the market closed Tuesday that its profit grew 3 percent. Additionally, its sales rose 2 percent, marking an improvement from several quarters of declines.

Shares of Whole Foods rose $4.29, or 17.3 percent, to $29.11 in heavy afternoon trading. The stock earlier traded as high as $30.13, eclipsing a previous 52-week high of $25.14 set July 30.

Standard&Poor's Equity Research increased its 2009 and 2010 estimates Wednesday and raised its 12-month share price target from $15 to $24.

Joseph Agnese, a retail analyst at Standard&Poor's, said Whole Foods still faces some challenges. The company will have fewer opportunities for further cost cuts and margin improvement going forward, he said.

S&P reiterated a "Sell" rating on Whole Foods shares.

Several other analysts raised price targets on Whole Foods as well. Additionally, Morgan Stanley upgraded the grocer to "Equal Weight" from "Underweight."