Sprouts Farmers Market initiated with an Underperform at Evercore ISI

Evercore ISI analyst Michael Montani initiated coverage of Sprouts Farmers Market with an Underperform rating and $29 price target. The analyst believes the company is likely to cede market share due to its "outsized" West Coast exposure, relatively high price perception, and increased competition. Sprouts adjusted EBIT Margin is up 170 basis points since 2019 and is likely to contract in a slowing environment, the analyst tells investors in a research note. In a decelerating consumer landscape, risk remains to traffic and margins for a grocer that is perceived to have a premium offering, writes the firm.