Wells Fargo analyst Edward Kelly downgraded United Natural Foods to Underweight from Equal Weight with a $6 price target. In a research note to investors, Kelly says he has concerns around the the fundamental outlook and his view that the stock will underperform the Staples Retail/Food Service industry over the next 12-months. While he thinks the rationale of the Supervalu deal makes some sense, the defensive nature of the deal confirmed the tough industry outlook, operational challenges at Supervalu since indicate the company materially overpaid, and the transaction overall added significant risk given the integration task ahead and added leverage. On the surface, Kelly says the stock looks cheap, but actually still sees plenty of potential for downside from here.