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Investing.com - RBC Capital has raised its price target on Sprouts Farmers Market (NASDAQ:SFM) stock to $173.00 from $172.00 while maintaining a Sector Perform rating. According to InvestingPro data, the stock has delivered an impressive 96% return over the past year and is currently trading near its 52-week high of $182.
The firm increased its second-quarter net sales growth forecast to 15% from its previous estimate of 14%, compared to consensus expectations of 14.5%. This growth is expected to be driven by same-store sales growth of 8.5% and 13 new store openings. This forecast aligns with the company’s strong track record, as InvestingPro data shows trailing twelve-month revenue growth of 15.51% and an excellent Financial Health Score of GREAT.
RBC Capital now projects approximately 85 basis points of operating margin expansion for the quarter, exceeding Sprouts’ guidance of 60 basis points. This improved outlook has led the firm to increase its second-quarter adjusted earnings per share estimate to $1.27, up from its previous forecast of $1.23.
The firm noted that after Sprouts missed what were likely elevated investor expectations over the past two quarters, current expectations appear "much more reasonable," creating what it describes as "a decent setup" heading into the earnings report.
RBC Capital maintained its Sector Perform rating on Sprouts Farmers Market stock while implementing the modest $1 increase to its price target.
In other recent news, Sprouts Farmers Market reported strong financial results for Q1 2025, with earnings per share (EPS) of $1.81, surpassing the forecasted $1.54. Revenue for the quarter aligned with projections, reaching 2.2 billion dollars, marking a 19% increase year-over-year. CFRA analyst Arun Sundaram 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. UBS maintained a Neutral rating for the company, emphasizing Sprouts’ strategic focus on niche dietary products and its potential for same-store sales growth. The introduction of a new loyalty program in 2025 is expected to further boost sales, while a shift to self-distribution for meat and seafood is projected to improve margins. Sprouts plans to open at least 35 new stores in 2025, aiming for total sales growth of 12-14% for the year. The company’s strategic initiatives continue to target health-conscious consumers, supporting its growth trajectory.
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