Grocery store concern Sprouts Farmers Market Inc (NASDAQ:SFM) has endured a choppy journey lower in the past 12 months, evidenced by its 26.2% year-over-year deficit and early February record low of $14.51. While the shares have since bounced from this region, the rally was short-lived, with SFM consolidating back below the $17.50 level. And to add insult to injury, this bounce put the equity right in line with a historically bearish trendline that could send SFM right back towards its February bottom.
Specifically, the equity is now within one standard deviation of its 80-day moving average, following a lengthy period below the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar moves have occurred in the past three years, with SFM lower one month later each time and averaging a negative one-month return of 6.89%. Today, SFM is off 4.6% at $15.96, and from its current perch, a similar swing could send the stock back down to its early February levels to $14.86.
Looking at analyst attention, three of the 11 analysts covering the stock consider it a "strong buy," while the rest say "hold" or worse. The consensus 12-month price target of $20.57, meanwhile, is a solid 29% premium to current levels.
The option pits, traders have been overwhelmingly bullish. SFM sports a 10-day call/put volume ratio of 34.28 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 78th percentile of its annual range, indicating an unusually large appetite for long calls of late.