Stock Story -
What Happened: Shares of grocery store chain Sprouts Farmers Market (NASDAQ:SFM) jumped 20.1% in the pre-market session after the company reported second-quarter earnings results. SFM provided an optimistic full-year earnings forecast, which blew past analysts' expectations. Its revenue and EPS also outperformed Wall Street's estimates during the quarter. Zooming out, we think this was a great quarter that shareholders will appreciate.
Following the results, Wall Street analysts raised the stock's rating. BMO (TSX:BMO) analyst Kelly Bania upgraded the stock from Underperform to Market Perform and raised the price target from $40 to $102. The analyst added "Even if the competitive risks start to have an impact, [comparable store sales] have accelerated to a point that the company may still be able to absorb these impacts, and may still reach same-store sales targets."
Is now the time to buy Sprouts? Find out by reading the original article on StockStory, it's free.
What is the market telling us: Sprouts's shares are not very volatile than the market average and over the last year have had only 2 moves greater than 5%. Moves this big are very rare for Sprouts and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 15.2% on the news that the company reported first-quarter results with same-store sales above expectations, leading to a revenue and, ultimately, an EPS beat. Sprouts's optimistic earnings forecast for the next quarter and the full year were impressive, which beat analysts' expectations. Zooming out, we think this was a great quarter that shareholders will appreciate.
Sprouts is up 96.1% since the beginning of the year, and at $96.53 per share, has set a new 52-week high. Investors who bought $1,000 worth of Sprouts's shares 5 years ago would now be looking at an investment worth $5,560.
