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Investing.com -- Jefferies upgraded Sprouts Farmers (NASDAQ:SFM) Market to Buy, citing strong second-quarter results, raised guidance, and accelerating store and loyalty program momentum as signs of durable growth in the health-focused grocery chain.
The firm said Sprouts delivered double-digit same-store sales growth in Q2, driven by increased customer traffic and strong performance from new stores.
Management lifted full-year 2025 guidance and hinted at above-algorithm comp growth continuing into 2026.
With Q2 comps running above the company’s long-term low-single-digit algorithm and new stores outperforming expectations, especially in newer markets like the Mid-Atlantic, Jefferies sees room for upside.
The company plans to open 35 new stores in 2025, up 8% year-on-year, and has over 130 sites approved, a 30% increase from year-end 2024.
Sprouts’ Innovation Center is also playing a growing role, Jefferies noted, helping the grocer differentiate through early-stage, health-conscious products that drive larger baskets.
Meanwhile, the new Sprouts Rewards loyalty program has shown early signs of boosting customer frequency and spend, with a nationwide rollout expected by end-2025.
Jefferies said these levers, consistent comp outperformance, brand alignment with evolving consumer preferences, and scalable expansion, support a more bullish view on the stock.
It raised its 2025–2027 EBITDA estimates by mid-single digits and lifted its price target to $190, based on ~20x forward EBITDA.
Jefferies sees the recent post-Q2 share pullback as a buying opportunity, saying the outlook remains attractive amid strong execution and a loyal, health-driven customer base.