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Investing.com - Wells Fargo (NYSE:WFC) upgraded Sprouts Farmers Market (NASDAQ:SFM) from Equal Weight to Overweight on Tuesday, while raising its price target to $180.00 from $175.00. The stock has demonstrated strong momentum, delivering a 61.91% return over the past year and 21.04% year-to-date, according to InvestingPro data.
The upgrade comes amid a recent pullback in the specialty grocery retailer’s stock, which Wells Fargo views as a buying opportunity despite investor concerns about decelerating comparable store sales growth.
Wells Fargo cited several factors supporting its more bullish stance, including Sprouts’ strong secular growth, differentiated business model, self-improvement initiatives, and substantial growth runway.
The firm expects Sprouts’ comparable store sales to bottom out at a mid-single-digit percentage range in the second half of 2025, which it considers attractive given market conditions.
Wells Fargo also noted that Sprouts’ target market is growing at this rate independently, while new store openings could add an estimated 100-200 basis points of growth, with additional upside potential from the company’s loyalty program and other initiatives.
In other recent news, Sprouts Farmers Market reported robust second-quarter results for 2025, exceeding analysts’ forecasts. The company achieved an earnings per share of $1.35, surpassing the expected $1.23, while revenue reached $2.2 billion, exceeding the anticipated $2.17 billion. This performance was supported by a 10.2% same-store sales growth, which outpaced analyst estimates and consensus expectations. Despite these strong results, UBS lowered its price target for Sprouts Farmers Market to $180, citing supply chain impacts, although it maintained a Neutral rating.
Barclays (LON:BARC) offered a contrasting perspective by upgrading the stock to Overweight, raising its price target to $185. Barclays expressed confidence in the company’s growth outlook, highlighting the potential of Sprouts’ loyalty program and e-commerce operations. Meanwhile, BMO Capital adjusted its price target to $170, maintaining a Market Perform rating, due to expectations of a deceleration in comparable sales growth. These developments reflect varying analyst expectations for the company’s future performance.
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