Goldman Sachs cut its Sprouts price target citing concerns over weaker Q4 sales and margins.
Roth Capital cited rising competition and uncertainty over consumer response to planned pricing investments.
Bank of America downgraded Sprouts to ‘Underperform’ from ‘Buy’ and slashed its price target to $47 from $100.
Sprouts Farmers Market (SFM) stock is heading for its worst weekly performance on record as disappointing third-quarter (Q3) results and a weak fourth-quarter outlook fuel Wall Street’s concerns. Four major analyst firms slashed price targets, with two downgrading the stock, citing slowing sales, margin pressures and growing competition as the grocer ramps up pricing investments.
Sprouts Farmers Market stock edged down 0.4% overnight, ahead of Friday. The stock has plunged 27% this week and is also on track for its worst month ever.
Wall Street Turns More Cautious On Sprouts Farmers Market
Goldman Sachs analyst Leah Jordan slashed the price target to $58 from $94 but kept a ‘Buy’ rating. The Q3 earnings miss was expected, but the analyst was surprised by a weak Q4 outlook, which could slow store sales growth and reduce profit margins.
In Q3, Sprouts reported $2.3 billion in net sales, up 5% year-on-year. However, comparable-store sales fell 0.9%. Sprouts expects comparable-store sales to decline between 2% and 4% in Q4, with earnings per share of $0.47 – $0.51.
“While a challenging consumer environment and the cyclospora disruption affected the quarter, we recognize the need to improve our performance and are taking action to strengthen execution and drive traffic,” said CEO Jack Sinclair.
With Nick Konat scheduled to become CEO in January, Goldman Sachs said investors should monitor customer engagement and perceptions of the company’s pricing. The firm also highlighted the importance of assessing whether additional spending and upcoming pricing changes can improve customer response.
Roth Capital also lowered its target, bringing it down to $56 from $82 while retaining a ‘Neutral’ rating. The firm pointed to disappointing comparable sales and earnings. Although Sprouts plans to increase investments in Q4, Roth sees uncertainty around how shoppers will respond. Intensifying competition and consumers’ growing focus on affordability also cloud the company’s 2027 outlook.
Bank Of America, RBC Downgrade Sprouts Farmers Market
Bank of America took a more bearish stance, downgrading SFM to ‘Underperform’ from ‘Buy’ and cutting its price target to $47 from $100. The analyst linked weaker Q3 comparable-store sales to difficult consumer conditions and disruption linked to a Cyclospora outbreak.
The firm expects additional pressure on revenue growth, store traffic and profit. It also warned that Sprouts’ efforts to make products more affordable could weigh further on average customer spending in 2027.
RBC Capital lowered its rating on SFM to ‘Sector Perform’ from ‘Outperform’ and cut its price target to $49 from $111. The firm pointed to growing grocery competition and uncertainty over whether Sprouts’ planned investments will attract more customers.
SFM Stock: Retail View
However, on Stocktwits, retail sentiment around the stock remained ‘extremely bullish.’
A user said, “Added 1000 shares in premarket at 47.25. Going to sit on this and not look at it for another year. They will get through the rough patch of the fourth quarter, and things will normalize next year. ”
SFM stock has cratered 39% year-to-date.
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Shivani Kumaresan has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
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