Sprouts Farmers Market closes $600 million revolving credit facility
Investing.com - Barclays (LON:BARC) initiated coverage on Sprouts Farmers Market (NASDAQ:SFM) with an Equalweight rating and a price target of $173, according to a research note released Monday. The stock, currently trading at $165.65, has demonstrated remarkable strength with a 102% return over the past year and 30% year-to-date gains.
The investment bank expressed a positive view of Sprouts’ "revamped model" and highlighted the company’s "unique growth story," which includes potential to maintain elevated sales growth compared to competitors in the food retail space. This optimism appears warranted, given the company’s robust 15.5% revenue growth in the last twelve months and GREAT financial health score according to InvestingPro analysis.
Barclays balanced its optimistic outlook with caution regarding high market expectations and the stock’s recent valuation increase ahead of Sprouts’ upcoming second-quarter earnings report.
The firm also noted its expectation for "some moderation in sales and margin momentum" for Sprouts through the remainder of 2025, while suggesting their analysis supports "modest upside to current expectations."
The Sprouts coverage initiation was part of a broader Barclays report on the food retail sector, which included new coverage of Kroger (NYSE:KR) and Albertsons Companies (NYSE:ACI), along with updated views on existing names in their coverage universe.
In other recent news, Sprouts Farmers Market reported strong financial results for the first quarter of 2025, with earnings per share (EPS) of $1.81, surpassing the forecasted $1.54. Revenue was in line with projections, reaching $2.2 billion, marking a 19% increase year-over-year. CFRA upgraded Sprouts Farmers Market shares to Buy, raising the price target to $205, citing the company’s robust margin expansion and potential for new store openings. RBC Capital also adjusted its price target slightly to $173, maintaining a Sector Perform rating, and noted a projected operating margin expansion for the second quarter. UBS kept a Neutral rating with a $196 price target, highlighting the retailer’s strategic shift and niche focus in the U.S. Food Retail sector. Sprouts Farmers Market plans to open at least 35 new stores in 2025 and is launching a new loyalty program expected to boost sales in late 2025 and 2026. The company is also transitioning to self-distribution for meat and seafood, which is anticipated to improve margins in 2026. These developments reflect Sprouts Farmers Market’s ongoing efforts to leverage growth opportunities and enhance profitability.
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