Evercore ISI initiated coverage on Sprouts Farmers Market (NASDAQ:SFM) with an Underperform rating and a $29.00 price target, noting it views the company as likely to cede share because of significant West Coast exposure, a relatively high price perception, and mounting competition.

While credit management has successfully transformed the business in recent years, the company's premium offerings make it vulnerable to traffic and margin risks in a decelerating consumer landscape.

The analysts believe that the company's sales and margins are likely to moderate, and they expect a valuation that is relatively and absolutely at the lower end of its historical range to be appropriate.