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Why is Sprouts Farmers Market (SFM) Stock Falling Today?
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On Thursday, shares of organic grocery chain Sprouts Farmers Market Inc. (SFM - Free Report) are falling, down almost 9% in midday trading following a downgrade at Morgan Stanley.
Analyst Vincent Sinisi downgraded SFM stock from Overweight to Equal Weight, though the firm reiterated its price target of $23. Sprouts is now trading at a 25x multiple on Sinisi’s 2018 earnings per share estimate, representing a 12-month high for SFM stock and a 25% premium to the food retail group that he covers, notes Benzinga.
Morgan Stanley remains positive on Sprouts, as the grocer is a strong natural and organic player, and was the only food retailer it covers with positive same-store sales. The firm “now believe[s] the shares are fairly valued relative to future growth potential,” it said in a note.
Additionally, Sprouts Chief Financial Officer Bradley Lukow said that the company’s first quarter experienced 300 basis points of deflation, with produce seeing double-digit deflation; Lukow was speaking at the Deutsche Bank dbAccess Global Consumer Conference.
And, digital grocery rival Amazon (AMZN - Free Report) announced this morning that it has expanded its Prime Now one- and two-hour delivery to Denver. This service includes delivery of grocery and fresh items from Sprouts.
Currently, SFM is a #2 (Buy) on the Zacks Rank, with a VGM score of ‘B.’
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Why is Sprouts Farmers Market (SFM) Stock Falling Today?
On Thursday, shares of organic grocery chain Sprouts Farmers Market Inc. (SFM - Free Report) are falling, down almost 9% in midday trading following a downgrade at Morgan Stanley.
Analyst Vincent Sinisi downgraded SFM stock from Overweight to Equal Weight, though the firm reiterated its price target of $23. Sprouts is now trading at a 25x multiple on Sinisi’s 2018 earnings per share estimate, representing a 12-month high for SFM stock and a 25% premium to the food retail group that he covers, notes Benzinga.
Morgan Stanley remains positive on Sprouts, as the grocer is a strong natural and organic player, and was the only food retailer it covers with positive same-store sales. The firm “now believe[s] the shares are fairly valued relative to future growth potential,” it said in a note.
Additionally, Sprouts Chief Financial Officer Bradley Lukow said that the company’s first quarter experienced 300 basis points of deflation, with produce seeing double-digit deflation; Lukow was speaking at the Deutsche Bank dbAccess Global Consumer Conference.
And, digital grocery rival Amazon (AMZN - Free Report) announced this morning that it has expanded its Prime Now one- and two-hour delivery to Denver. This service includes delivery of grocery and fresh items from Sprouts.
Currently, SFM is a #2 (Buy) on the Zacks Rank, with a VGM score of ‘B.’
3 Stocks to Ride a 588% Revenue Explosion
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>