Has the sell-off in the organic and natural foods giants created a buying opportunity? Apparently that is what Oppenheimer believes, but selectively. The firm’s Rupesh Parikh has initiated coverage on the natural foods sector and assigned a new Outperform rating to Whole Foods Market Inc. (NASDAQ: WFM).

Note that the call may be bullish for Whole Foods, but it is not necessarily bullish for the company’s rivals. The stocks of Sprouts Farmers Market Inc. (NASDAQ: SFM) and The Fresh Market Inc. (NASDAQ: TFM) were both initiated with Market Perform ratings in the same call.

The outperform rating on Whole Foods Market Inc. (NASDAQ: WFM) does at least address the idea of near-term pains for long-term gains. Parikh’s price target is $63.00, versus a $52.31 close and a consensus price target of $59.64. As Whole Foods is the long-standing leader in the specialty grocery sector, it is called the best positioned to gain market share in the rapidly growing natural and organics food category. In fact, the company’s latest ambition is to grow from 350 locations to around 1,200 longer term.

Parikh said:

Whole Foods has undertaken price investments lately to improve value positioning vs. peers. Our early conversations with clients suggest that investors are increasingly comfortable with the cost of these investments near term, but still under-appreciate their long-term potential. Key to our call is our view that Whole Foods shares will grind higher even as Street forecasts notch lower given already more subdued underlying expectations.

Sprouts Farmers Market Inc. (NASDAQ: SFM) was initiated as Perform, and the price target of $35.00 compares to a share price of $36.44. Parikh believes that Sprouts shares fully reflect their growth potential. While Parikh believes it is a viable competitor nationally, the company’s future enterprise value over EBITDA is 19 times for 2015, fully valuing its growth prospects and earnings upside. Sprouts has a consensus price target of $40.64.

The Fresh Market Inc. (NASDAQ: TFM) was also started with only a Perform rating, as this one is called more susceptible to increasing competition. Parikh assigned a $34 price target, versus a current $34.37 price. Still, it is believed that the company can expand from about 150 stores to more than 500 units over time. Oppenheimer is less aggressive here than Wall Street rivals, as Thomson Reuters shows the consensus analyst target price at $46.40.

Maybe Whole Foods is now finally a cheap stock on a relative basis. While it trades almost 33 times expected 2014 earnings and at 28 times expected 2015 earnings, 24/7 Wall St. has warned that evaluating Whole Foods as a traditional grocery store is just not the right read at all. Whole Foods should be evaluated as a specialty upscale retail growth story, with pricing power and with far higher margins than its peers.

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