What Happened?
Shares of grocery store chain Sprouts Farmers Market (NASDAQ: SFM) jumped 4.3% in the afternoon session after RBC Capital upgraded the stock from "Sector Perform" to "Outperform".
The investment firm noted that Sprouts' shares had declined approximately 42% since their peak in June, underperforming grocery peers. RBC Capital stated its belief that concerns about the company's recent promotional activity were "overblown." While the firm adjusted its price target down to $148 from $176, the new target still represented about 43% potential upside from the trading price at the time. The bank projected that Sprouts could achieve low double-digit revenue growth and low to mid-teens earnings per share growth over the medium term.
After the initial pop the shares cooled down to $107.21, up 4.4% from previous close.
Is now the time to buy Sprouts? Access our full analysis report here.
What Is The Market Telling Us
Sprouts’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 13.7% on the news that the company reported a "beat and raise" quarter. Third quarter results blew past analysts' revenue , EBITDA, and EPS estimate. Amid that management considered robust traffic and high execution levels, the solid performance enabled SFM to raise full-year sales and profitability guidance. Zooming out, we think this quarter featured some important positives.
Sprouts is down 19.4% since the beginning of the year, and at $107.21 per share, it is trading 40.3% below its 52-week high of $179.53 from June 2025. Investors who bought $1,000 worth of Sprouts’s shares 5 years ago would now be looking at an investment worth $4,893.
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