Evercore ISI raises price target to $120 after CEO meeting By Investing.com

Investing.com – Evercore ISI raised the rating for Sprouts Farmers Market (NASDAQ:) from “In Line” to “Outperform” and increased the price target from $96 to $120.

Analyst Michael Montani justified the upgrade with a constructive meeting with CEO Jack Sinclair, CFO Curtis Valentine and Head Merchant Scott Neal last week. Montani explained that Sprouts is well positioned to benefit from a trend towards healthier eating and the increasing demand for meal solutions for at home. In particular, the differentiated offering with a high proportion of organic, gluten-free and non-GMO products sets Sprouts apart from competitors such as Walmart (NYSE:) and appeals to a wealthy, health-conscious customer base.

On the margin side, Montani sees additional potential through greater use of supplier relationships, which is why he is raising the gross margin forecast by 30 basis points through 2025. Overall, the meeting reinforced his positive assessment of Sprouts’ revenue and margin drivers, as well as its operational efficiency and ability to gain market share, even in the face of a difficult consumption environment among lower-income consumers.

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