BofA Securities analyst Robert Ohmes made a significant move by upgrading the rating for Sprouts Farmers Market Inc SFM from Underperform to Buy.
Ohmes also raised the price target from $30 to $70.
This upgrade follows the announcement that Sprouts Farmers Market has inked a deal with Uber Eats, a subsidiary of Uber Technologies Inc, to make over 15,000 products available for delivery.
Additionally, the company has strategically pivoted towards achieving a higher store growth rate, expected to reach around 9%, with ambitions to surpass a 10% target by 2025.
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Investment Argument for Sprouts Farmers Market: Ohmes underscored the company’s exceptional positioning in the Food Retail segment.
“We believe SFM has navigated past the traffic hurdles that followed adjustments in its promotional strategies, now boasting higher margins and a resurging customer base,” the analyst remarked in his upgrade note.
With a footprint of over 400 stores, Sprouts Farmers Market is gaining a competitive advantage through its distinct assortment of attribute-based products such as organic, grass-fed, vegan, and keto items, further solidifying its market presence.
On the back of a stellar fourth-quarter performance, Ohmes raised the earnings estimate for 2024 by 15 cents to $2.90 per share, showcasing his confidence in the company’s growth trajectory.
Sprouts Farmers Market Stock Performance: Shares of Sprouts Farmers Market surged by 1.73% to $61.38 at the time of this publication on Tuesday.
Image: Courtesy of Sprouts Farmers Market