RBC Capital analyst Steven Shemesh reiterated an Outperform rating and $114.00 price target on Sprouts Farmers Market (NASDAQ:SFM).
Reuters reported Kroger is preparing to cut prices on thousands of items to curb market share losses. The grocery giant, with $147.64 billion in revenue, has seen its stock decline 7.58% over the past week and trades near its 52-week low of $58.60.
RBC analysis found approximately 66% of Sprouts stores have at least one Kroger within five miles. Numerator Insights data shows about 66% of Sprouts shoppers have also shopped at Kroger in the last 12 months.
RBC Capital sees potential risks to Sprouts from narrowing price gaps and elevated gas prices, which may lead to trip consolidation, as Sprouts operates as a supplementary grocery store.
RBC created a price tracker measuring produce pricing on approximately 120 organic and conventional items. The analysis suggests since July 2025, Sprouts' price positioning versus Kroger has worsened modestly.
RBC intends to refresh the analysis monthly. The firm remains cautiously optimistic but sees more risk than previously.
In other news, Walmart absorbed approximately $175 million in unexpected fuel costs in Q1 fiscal 2027. Kroger plans to reduce prices on thousands of products under new CEO Greg Foran.
