Imperial Capital on Sprouts Farmers Markets

In a research note released Friday, Imperial Capital analyst Mitchell P. Pinhiero Initiated coverage on Sprouts Farmers Markets

with an In-line rating and a price target of $36 per share. The company has had a decline of 35 percent from its post-IPO highs that it had reached in October 2013. The analyst said, “We believe the stock remains richly priced, particularly relative to its peers, which have equally compelling growth stories.” In addition, the analyst believes that the company can increase revenue and earnings per share at a 3-year CAGR of 15% and 28%, respectively. Furthermore, the analyst used the following reasons as rationale for the price target. • Large and growing market • EBITDA valuation premium of 121% to its peers keeps us on the sidelines. A long runway of unit growth. • Natural and organic segment competitive environment