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Shares of Sprouts Farmers Market rose Monday as Wall Street's outlook for the grocer's stock turned a bit greener.
Sprouts’ (SFM’s) stock recently rose by more than 3% above $140. The shares are now up 11% in the last year but still a long way from their 2025 highs, closer to $180. The latest catalyst is an upgrade by analysts at Deutsche Bank who raised their rating to “buy”. They set a price target of $190, which is about 40% higher than the Friday’s closing price and 9% more than Visible Alpha’s consensus of $175.
"We had been fans of the story and the management team but were waiting for a better entry point," the analysts wrote. "We think we are now there."
Deutsche Bank’s argument was based on its optimism about same-store growth, driven in part by improving product offerings, trends that point to healthier eating, and a loyalty program in the works. The analysts wrote that the stock “warrants premium valuation”, more in line with warehouse clubs such as Costco (COST), than other grocers.
In February, the company reported results for 2024 that showed a 13% increase in sales and a comparable-sales increase of about 8%. Investors were told to expect net sales and comparable sales growth of 5.5% and 11.5% for the full year.
Visible Alpha tracks four analysts with "buy" ratings on Sprouts, and five with "holds."
