Deutsche Bank Launches Coverage on Sprouts Farmers Market with Buy Rating

Deutsche Bank has formally initiated coverage on Sprouts Farmers Market, Inc. (SFM), assigning it a 'Buy' rating and setting a price target of $52 per share. The bank highlighted the company’s consistent same-store sales growth and expanding market share in the natural and organic food segment as key drivers. In its first report, Deutsche Bank pointed to SFM’s 3.4% same-store sales increase in Q4 2025, outpacing the broader grocery retail sector, which saw flat growth during the same period. The firm also noted a 12.7% increase in membership-driven sales, underscoring the strength of the company’s loyalty program and customer retention strategy. The analysis emphasized Sprouts’ disciplined expansion model, with 14 new stores opened in 2025 and 18 planned for 2026, primarily in high-growth regions including the Southwest and Southeast U.S. These locations are expected to contribute to a 5.1% revenue compound annual growth rate over the next three years, according to the bank’s internal projections. Additionally, Deutsche Bank cited improvements in inventory turnover and supply chain efficiency, which have helped margin stabilization despite elevated input costs. The move signals growing institutional confidence in Sprouts’ ability to navigate inflationary pressures and increasing competition from national chains and e-commerce platforms. The bank’s initiation follows a broader trend of increased analyst attention on specialty grocery retailers with strong brand loyalty and health-conscious consumer appeal. Shares of SFM rose 2.3% in after-hours trading following the announcement, reflecting positive market reception to the new coverage.