Sprouts Farmers Market (SFM) is likely to show a strong print in Q2 on somewhat more reasonable expectations, RBC Capital Markets said in a Tuesday note. The Q2 results are due July 30.

For Q2, RBC raised its net sales growth forecast to 15% from 14% previously, and against market consensus of 14.5%. It modelled about 85 bps of operating margin expansion, resulting in adjusted EPS of $1.27, up from $1.23 previously.

"After missing what was likely a very elevated buyside bar over the last ~2 quarters, expectations seem much more reasonable to us, making for a decent setup into the print," the report said.

RBC raised its price target to $173 from $172 while keeping its sector perform rating on the stock.

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