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Investing.com - Evercore ISI has raised its price target on Sprouts Farmers Market (NASDAQ:SFM) to $190.00 from $185.00 while maintaining an Outperform rating ahead of the company’s second-quarter earnings report, scheduled for July 30. The specialty grocer, currently valued at nearly $16 billion, trades at a P/E ratio of 36.6x. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.
The specialty grocery retailer has outperformed the market year-to-date, with shares up 29% compared to the Consumer Staples Select Sector SPDR Fund’s 4% gain and the Russell 1000 Index’s 8% increase, according to Evercore ISI. InvestingPro data shows even more impressive gains, with a 96% return over the past year and the stock trading near its 52-week high of $182.
Evercore ISI attributes the stock’s strong performance to traffic growth, market share gains, and improved overhead control. The firm also notes Sprouts benefits from being relatively insulated from tariff impacts, offering food-at-home value for budget-conscious consumers, and exposure to healthy eating trends. This success is reflected in the company’s robust 15.5% revenue growth and "GREAT" financial health score from InvestingPro, which offers 12 additional key insights about SFM’s investment potential.
The investment firm anticipates Sprouts will report better-than-expected second-quarter revenue with positive momentum entering the third quarter, leading Evercore to raise its 2025 and 2026 earnings per share estimates by 10 and 20 cents, respectively.
Evercore ISI expressed particular interest in early results from Sprouts’ loyalty program rollout, which it believes could create opportunities for targeted promotions to increase customer spending and eventually lead to high-margin data monetization.
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, significantly exceeding the forecasted $1.54. Revenue aligned with projections, reaching $2.2 billion. CFRA analyst Arun Sundaram upgraded Sprouts Farmers Market shares to Buy, raising the price target to $205 from $149, highlighting the company’s strong comparable sales growth and potential for new store openings. RBC Capital also adjusted its price target for Sprouts to $173, noting an increase in second-quarter net sales growth forecast to 15%, driven by same-store sales growth and new store openings.
Barclays (LON:BARC) initiated coverage on Sprouts with an Equalweight rating, emphasizing the company’s unique growth story and potential to sustain elevated sales growth. UBS maintained a Neutral rating with a $196 price target, recognizing Sprouts’ strategic shift and focus on niche markets within the U.S. food retail sector. The company’s specialized approach is seen as beneficial in attracting customers with specific dietary needs. These developments reflect Sprouts Farmers Market’s ongoing momentum and strategic initiatives in the competitive food retail industry.
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