UBS has revised down its price target for Sprouts Farmers Market (NASDAQ:SFM) to $75 from $108, while maintaining a Neutral rating on the grocery chain's stock. The new target sits at the low end of the analyst range, which spans $75 to $140, based on available analyst projections.
The firm highlighted that Sprouts' market valuation has deteriorated in recent months as the company contends with wider pressures in consumer health and retailing. UBS noted the stock now trades at roughly 12 times earnings, a valuation similar to levels seen in February 2023. Complementary data points indicate a current P/E of 13.2, which implies a relatively low valuation against its estimated Fair Value.
That represents a substantial contraction from the multiple as high as about 37 times earnings reached in January 2025. UBS described the pullback in the share price as appropriate, even while acknowledging that Sprouts is a stronger retailer than before the COVID period. Over the past year, the stock has fallen 60.6% and recently traded near its 52-week low of $64.75.
According to the UBS analyst, Sprouts' previous growth pattern was not sustainable. The company benefited from several favorable and time-limited factors between 2023 and 2025, including relatively easy multi-year comparisons, a deconsolidation trend away from conventional grocers, rapid expansion in natural and organic product categories, and the maturation of its newly implemented strategy.
UBS pointed to more difficult year-over-year comparisons, cost-of-living pressures on consumers, and less favorable population growth trends as likely contributors to the retailer's fourth-quarter results and its first-quarter performance to date. Investors are advised that Sprouts is scheduled to report earnings tomorrow, an event UBS expects may clarify how these dynamics are affecting operational results.
Despite the recent headwinds identified by UBS, other markers of corporate strength remain. Research intelligence identifies management's aggressive share repurchase activity and the company's relatively moderate debt burden as positives for Sprouts' financial position.
Other brokerages have also adjusted their views recently. Evercore ISI cut its price target to $83.00 from $130.00 while retaining an Outperform rating; the firm added Sprouts to its Underperform TAP List and suggested a near-term fair value around $60, signaling concern over potential downside ahead of the fourth-quarter earnings report that was scheduled for February 19. Jefferies reduced its price target slightly to $105.00 from $110.00 but kept a Buy rating, noting intensifying competitive pressures - specifically citing Amazon's expansion of its Whole Foods business - and the prospect that moderating food inflation could hinder efforts to accelerate comparable-store sales growth.
Collectively, these analyst moves reflect a cautious near-term outlook for Sprouts Farmers Market, with concerns centered on the sustainability of past growth drivers and the impact of macroeconomic and competitive forces on the grocer's sales and margins.
Note: This article presents analyst actions and market data related to Sprouts Farmers Market. It does not provide investment advice.