Goldman starts Sprouts at Neutral, says forward multiple is high

Sprouts Farmers Market (SFM) is under pressure, falling 2.6% in premarket trading after Goldman initiates the shares at Neutral with a price target ($33) that's ~15% below Monday's close.

"While we are attracted to SFM's long-term growth potential and competitive position, the market has quickly appreciated this growth," analyst Stephen Grambling says.

The shares trade at nearly 80x forward earnings (Goldman's estimates), which Grambling notes is a "meaningful premium to the specialty peer group average of 42x."

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