Ahead of the Bell: United Natural Foods

An analyst began coverage of United Natural Foods Inc. with a "Neutral" rating at $23 price target Thursday, saying the food distributor's future success depends on its ability to expand business in traditional supermarkets.

Jefferies & Co. analyst Scott Mushkin said United Natural Foods' acquisition of Millbrook Distribution Services Inc. last November should help the company make more inroads.

"The acquisition ... should allow it to win more supermarket business as many operators require the same distributor for their specialty and organic products," Mushkin wrote in a research note. "However, the integration has not been smooth."

Still, Muskin said the company's organic and natural food products will likely be able to withstand the nation's economic downturn.

"Organic products, we believe, are generally part of a lifestyle choice and are seen as an investment in personal welfare, which should make them more resistant to cuts in consumer spending," he wrote.