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Investing.com - BMO Capital has lowered its price target on Sprouts Farmers Market (NASDAQ:SFM) to $170.00 from $180.00 while maintaining a Market Perform rating. The stock, currently trading at $158.06, has demonstrated remarkable strength with a 58.23% return over the past year, according to InvestingPro data.
The adjustment follows Sprouts’ quarterly report showing strong comparable sales growth of 10% and greater-than-expected gross margin expansion of 38.72%, indicating continued market share gains for the specialty grocery retailer. With a market capitalization of $15.47 billion, Sprouts has maintained impressive revenue growth of 15.51% over the last twelve months.
BMO Capital noted that Sprouts’ commentary about plans for a two-year stack of 15% suggests a modest deceleration in comparable sales growth in upcoming quarters.
The research firm also highlighted potential margin headwinds in the second half of the year, including tough shrink comparisons, reduced supply chain expense leverage on comparable sales, and investments in self-distribution.
Due to these factors, BMO Capital believes the stock could face risk of modest multiple compression and remain range-bound, leading to the price target reduction while maintaining the neutral Market Perform rating.
In other recent news, Sprouts Farmers Market reported impressive financial results for the second quarter of 2025. The company exceeded analysts’ expectations with an earnings per share of $1.35, surpassing the predicted $1.23, which represents a 9.76% surprise. Revenue for the quarter reached $2.2 billion, slightly above the anticipated $2.17 billion. These results highlight Sprouts’ strong performance during the period. Despite the positive earnings report, the stock experienced a minor decline in aftermarket trading. The company’s financial achievements have attracted attention, with analysts closely monitoring its future prospects. Such developments may influence investor decisions and market perceptions.
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