Sprouts bidding war may ensue, Jefferies says as it maintains Buy rating

|By:, SA News Editor

Sprouts Farmers Market (SFM -1.5%) turns lower even after reports that privately-held Albertson’s could be interested in acquiring it, as investors that were active in SFM ahead of the news now take profits.

Maintaining its Buy rating and $22 stock price target, Jefferies analysts call SFM "one of the few high quality growth platforms remaining in grocery" and predict that it will continue to gain market share, The Fly.com reports.

Based on historical transactions in the grocery space and its belief that sales trends "remain good," Jefferies estimates SFM could be acquired for $26.

Meanwhile, larger rival Whole Foods Market (WFM +0.9%) is higher in a related trade.