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Investing.com - BMO Capital has lowered its price target on Sprouts Farmers Market (NASDAQ:SFM) to $90.00 from $120.00 while maintaining a Market Perform rating. The stock currently trades at $104.55, down 42% from its 52-week high of $182, according to InvestingPro data.
The price target reduction follows Sprouts Farmers Market’s third-quarter 2025 comparable sales deceleration and fourth-quarter 2025 comparable sales guidance that BMO described as "worse-than-feared."
According to BMO Capital, Sprouts management attributes the slowdown to softer consumer spending and tough year-over-year comparisons, while still expecting gross margin expansion in the near term. The company currently maintains a healthy 38.9% gross profit margin.
Management also indicated they anticipate a return to the high end of their algorithm as early as the second half of 2026, despite the current challenges.
BMO remains on the sidelines with its Market Perform rating, citing "a high-level of uncertainty on SFM’s comp and margin outlook," particularly given that EBIT margins have doubled in recent years. Despite these concerns, InvestingPro data shows SFM has a "GREAT" overall financial health score, with 13+ additional ProTips available to subscribers through the comprehensive Pro Research Report.
In other recent news, Sprouts Farmers Market reported its third-quarter 2025 earnings, which showed a mixed performance. The company exceeded expectations for earnings per share (EPS) by reporting $1.22, above the anticipated $1.17, resulting in a 4.27% surprise. However, the revenue did not meet forecasts, coming in at $2.2 billion, slightly below the expected $2.23 billion. Despite the earnings beat, the revenue miss highlights challenges in meeting market expectations. These recent developments are crucial for investors to consider.
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