Morgan Stanley downgraded Whole Foods Market (WFMI

) to equal-weight.

Analyst Mark Wiltamuth says although he's not overly concerned by weaker sales results in the second quarter, he thinks Whole Foods' reduced sales and earnings expectations for the second half will cause valuation contraction for the shares.

Wiltmuth says his concerns are lofty valuation, and the lack of a near-term catalyst for growth. He thinks Whole Foods will need positive fundamental news to drive valuation back up.