UPDATE: Deutsche Bank Initiates Coverage on Sprouts Farmers Market with Buy Rating, $52 PT on Multiple Positive Factors

In a report published Thursday, Deutsche Bank analyst Karen Short initiated coverage on

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.