RBC Capital Cuts Price Target on Sprouts Farmers Market (SFM) Following 2Q Results
RBC Capital maintained an Outperform rating on Sprouts Farmers Market (NASDAQ: SFM), and cut the price target to $35.00 (from $38.00), following 2Q15 results. SFM reported an adjusted EPS of $0.22 was in-line with the consensus estimate. Revenue was also in-line with consensus at $902m.
Analyst William Kirk commented, "As expected, unrelenting deflationary pressures led to a comparable store sales miss. Sprouts lowered forward guidance assuming: continued price investment, flat inflation, and higher cannibalization. That said, a sequential improvement in traffic and the strongest basket growth (ex. inflation) since 1Q14, give us confidence Sprouts is still operating at peak levels. We reiterate our Outperform, but lower our price target to $35 (from $38)."
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Shares of Sprouts Farmers Market closed at $23.50 yesterday.