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UPDATE: Deutsche Bank Initiates Coverage on Sprouts Farmers Market on Multiple Positive Factors

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In a report published Thursday, Deutsche Bank analyst Karen Short initiated coverage on Sprouts Farmers Market (NASDAQ: SFM) with a Buy rating and $52.00 price target.

In the report, Deutsche Bank “We are initiating coverage of Sprouts Farmers Market with a Buy rating and a $52 price target. Despite the current lofty valuation, we believe SFM is a Buy for the following reasons: 1) we think SFM's unit goal of 1,200 stores is realistic – and implies 18 years of 12%/yr unit growth, 2) SFM is well positioned to gain share in new and existing markets given the attractive price points in produce (25% of sales) and strict adherence to quality standards, 3) Next to TFM, SFM generates industry-leading new store IRRs, 4) ROIC is industry-leading on a lease-adjusted basis, and 5) while EV/EBITDAR is above peers, on a relative-valuation basis, FY15E valuation looks more reasonable.”

Sprouts Farmers Market closed on Wednesday at $44.23.

Posted-In: Deutsche Bank Karen ShortAnalyst Color Initiation Analyst Ratings

 

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