The firm also increased its price target to $25 from $24 on shares of the Phoenix-based natural and organic food retailer.
"We view SFM's low-price natural/organic format as ideal for long-term market share gains and with a recent reset in near-term expectations, we see limited downside/an attractive buying opportunity for a name with 12%-14% EBITDA growth," Jefferies wrote in an analyst note.
Sprouts could prove to be a relative outperformer until near-term pressures abate as a "robust" fall harvest could allow the company to engage in its core competencies and drive solid traffic gains via a healthy promo schedule, the firm noted.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income.
But the team also finds weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SFM