Market Preview: One Bad Apple

Caterpillar shares closed Tuesday at $81.43, down nearly 10% so far in 2012. Since hitting a 52-week high of $116.95 in late February, the shares have lost X%. The valuation is favorable though with the stock's forward price-to-earnings ratio at 7.4X.

Check out TheStreet's quote page for Caterpillar for year-to-date share performance, analyst ratings, earnings estimates and much more.

Whole Foods Markets(WFM) also gets the headliner treatment here. The average estimate of analysts polled by Thomson Reuters is for earnings of 61 cents a share from the Austin, Texas-based specialty supermarket operator in its fiscal third quarter ended in June on sales of $2.73 billion.

The stock has been a big winner in 2012, rising more than 20%. It hit a 52-week high of $97.25 on June 26 and closed Tuesday at $84.00.

Fourteen of the 26 analysts covering the stock are at either strong buy (5) or buy (9) but the 12 hold ratings and a median 12-month price target of $100 speak to some concern about valuation.

Williams Capital downgraded Whole Foods to market perform, the equivalent of a hold, from outperform last week while reiterating an $88 price target. The firm cited the stock's richness at the time (shares were still above $90), suggesting investors take profits.

"We believe that the upcoming earnings season could be challenging due to slowing consumer spending," Williams Capital wrote on July 18. "We continue to believe that Whole Foods Market is a best-of-breed company. We simply suggest patience in waiting for a more attractive entry point in a better consumer environment."

The firm is a penny below consensus for the third quarter, forecasting earnings of 60 cents a share and lifting expectations for fiscal 2012 to a profit of $2.36 a share from $2.34 a share.

"Whole Foods has long traded at a significant premium to the S&P 500, a reality we expect to continue based on its competitive positioning and superior growth rate," Williams Capital said. "We believe that high growth, large cap consumer staples companies, which are clearly early in their growth curve, are fairly difficult to find."

Check out TheStreet's quote page for Whole Foods Market for year-to-date share performance, analyst ratings, earnings estimates and much more.