Sprouts Farmers Market price target lowered to $182 by UBS on tough comps

Investing.com - UBS lowered its price target on Sprouts Farmers Market (NASDAQ:SFM) to $182 from $196 while maintaining a Neutral rating ahead of the company’s quarterly earnings report. The stock, currently trading at $158.89, has delivered an impressive 88.52% return over the past year, according to InvestingPro data.

The firm expects Sprouts to deliver another quarter of strong market share growth, projecting same-store sales growth of 9.0%, above the consensus estimate of 8.5% and the company’s guidance range of 6.5%-8.5%. With earnings scheduled for July 30 and the company maintaining a "GOOD" financial health score, InvestingPro subscribers can access 12 additional key insights about SFM’s performance.

UBS noted that buy-side expectations remain elevated, with investors looking for same-store sales in the 9%-10% range, while intra-quarter data suggests Sprouts’ model continues to appeal to attribute-driven shoppers and those seeking healthier eating options.

Despite positive current performance, UBS highlighted growing investor concerns about tougher comparisons in the second half of the year and potential macroeconomic challenges, with UBS Quant data suggesting the stock has become slightly less crowded as a long position.

The firm projects 5.3% same-store sales growth for the second half of 2025, above the consensus estimate of 4.7%, while noting investors are seeking evidence that Sprouts can sustain mid-to-high single-digit comparable sales growth amid more challenging conditions.

In other recent news, Sprouts Farmers Market has seen several analyst updates and adjustments to its stock price targets. Evercore ISI raised its price target for Sprouts Farmers Market to $190 while maintaining an Outperform rating, ahead of the company’s second-quarter earnings report. RBC Capital also increased its price target to $173, with an updated second-quarter net sales growth forecast of 15%, driven by same-store sales growth and new store openings. CFRA upgraded Sprouts Farmers Market to Buy from Hold, raising the price target to $205, reflecting a valuation based on increased earnings per share estimates for 2025 and 2026.

Barclays (LON:BARC) initiated coverage on Sprouts Farmers Market with an Equalweight rating and a price target of $173, citing the company’s unique growth potential in the food retail space. UBS maintained a Neutral rating with a $196 price target, noting Sprouts’ strategic shift away from price-sensitive consumers and its focus on niche dietary needs. The company is experiencing positive momentum from its specialized product offerings, which is seen as an advantage in attracting customers with specific dietary concerns. These developments highlight Sprouts Farmers Market’s ongoing efforts to capitalize on growth opportunities within the U.S. food retail sector.

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