Shares of Whole Foods Market Inc. have continued to slide after Lehman Brothers analyst Meredith Adler downgraded the stock ahead of the company's fiscal first-quarter earnings report.

But while Adler last month downgraded the stock to "underweight" from "equal weight" and cut her price target to $32 from $35, other analysts are more upbeat about the stock.

Adler said in a note to investors that she based her concerns on "management's poor stewardship of capital, as exemplified by the high cost and negative net present value of the recent Wild Oats acquisition."

Last year's acquisition put "strains on the organization" by integrating about 60 Wild Oats stores at the same time it is opening 22 new stores, "the most in its history," Adler said in the note. She said the company has accelerated growth at the same time the "most mature" stores of its core business are slowing, leading to "natural pressure on earnings as new stores are very expensive to open, and mature gradually."

She also raised concerns about increased competition from conventional and niche food retailers as well as the company's ability to improve efficiency and "generate adequate returns going forward, given a pipeline of big expensive stores and the potential for a further sales slowdown."

Austin-based Whole Foods on Feb. 20 posted fiscal first-quarter net income of $39.1 million, or 28 cents a share, down 27 percent from profit of $53.8 million, or 38 cents a share, in the year-earlier period. Analysts estimated earnings of 36 cents a share. Sales, however, rose 32 percent to $2.46 billion. ??Shares have fallen about 34 percent from a 52-week high close of $53.20. The stock closed March 4 at $35.14.

Citigroup analyst Gregory Badishkanian, meanwhile, is more cautiously optimistic. He cut his price target from $45 to $40 and rates the stock hold/medium risk.

"Whole Foods Market is the largest and best-run health food retailer — we would argue the best overall food retailer in the U.S. based on comparable store sales and earnings growth."

Badishkanian said the company has been achieving stronger comparable same-store sales and that it has "greater opportunity to open new stores within the U.S. market."

Mark Miller at William Blair & Co. lowered his fiscal 2008 earnings per share projection by 8 cents to $1.25, due to dilution from the Wild Oats acquisition. Miller maintains his outperform rating on the stock and said in a note that, "While we are disappointed by the unexpectedly large 8 cent earnings per share dilution from Wild Oats…management is taking the right steps overall…" He pointed to Whole Foods' growth in comparable same store sales in the quarter, "contrary to most retailers and a weaker economy."