Piper Jaffray reiterated an Overweight rating and $19.00 price target on Smart & Final Stores (NYSE: SFS) following the company's 4Q earnings report. Comparable sales grew 3.5% in Q4, a decrease from 4.8% in Q3 but relatively flat on a two-year stack basis.

Analyst Sean Naughton commented, "Last night, Smart & Final reported Q4 results marked by solid comparable sales results given the deflationary pressures that have plagued the grocery sector. Additionally, we believe several merchandise initiatives (bulk foods, natural/organic expanded offering) have helped Smart & Final garner a greater share of the customer wallet which should help alleviate deflationary pressures in the near-term. Furthermore, while early days it does sound like the Haggen store conversions are off to a strong start and we like the opportunity the deal presented to grow stores at an accelerated rate in attractive locations with below market rent. Comp guidance was a bit light of consensus expectations for 2016 but if deflation moderates as projected we think this could prove conservative. We continue to recommend SFS shares given the strong traffic trends and unit growth prospects."

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Shares of Smart & Final Stores closed at $16.61 yesterday.