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Chicago, IL – April 17, 2025 – Zacks Equity Research shares Sprouts Farmers Market, Inc. SFM, as the Bull of the Day and, Lennar Corp. LEN as the Bear of the Day. In addition, Zacks Equity Research provides analysis on — Carriage Services, Inc. CSV, Reed's, Inc. REED and BellRing Brands, Inc. BRBR.
Here is a synopsis of all five stocks:
Investors looking for stocks that have not only weathered the tariff-driven selloff but also surged in 2025 need look no further than Sprouts Farmers Market, Inc.
This specialty grocery company has soared 25% in 2025 as part of a 370% rally over the past two years, boosted by rising earnings revisions.
Despite its impressive run and tariff resilience, Sprouts Farmers Market stock remains on strong technical footing.
Sprouts Farmers Market is a somewhat under-the-radar specialty grocery store powerhouse.
The Phoenix-headquartered company operates roughly 440 stores across 24 states (it opened 33 stores in 2024), with a bulk of SFM locations scattered across California, Texas, Arizona, Florida and Colorado.
Known for its fresh, natural, and organic offerings, Sprouts appeals to higher-income consumers who are less impacted by economic downturns. Moreover, grocery shopping is often the last expense consumers cut during uncertain times, enhancing SFM’s resilience.
Sprouts is driving product innovation, expanding its e-commerce business, and growing its higher-margin private-label segment while maintaining competitive pricing. Its Sprouts brand accounted for 23% of Q4 2024 sales.
The company launched 7,100 new items in 2024, including over 300 under the Sprouts brand, demonstrating its agility in meeting consumer trends.
On the e-commerce front, partnerships with Uber Eats, DoorDash, and Instacart helped boost digital revenue by 37% in Q4. Management also prioritizes efficiency in the competitive grocery sector, with over 85% of stores located within 250 miles of a distribution center.
Sprouts thrives despite competition from Amazon AMZN-owned Whole Foods, Target TGT, and other pure-play grocery chains.
In 2024, the company grew sales by 13%, with comparable store sales up 7.6%, driving a 50% increase in adjusted earnings.
SFM is projected to boost same-store sales by 6% in 2025, marking its second-best annual expansion in five years. Revenue is expected to grow by 12% in 2025 and 11% in 2026, reaching $9.54 billion.
The firm is set to follow its strong EPS growth with 24% year-over-year expansion in 2025 and 14% in 2026. The company has exceeded quarterly earnings estimates by an average of 15% over the past four periods, and its earnings estimates have surged since its Q4 release.
SFM’s FY25 consensus earnings estimate has risen 10% in recent months, with FY26 estimates up 13%.
These revisions have earned SFM a Zacks Rank #1 (Strong Buy) and extended a streak of positive earnings revisions that have lifted its FY26 consensus by 55% over the past 12 months.
SFM stock traded roughly sideways from 2015 to 2022. It has broken out since then, soaring 400% over the past three years, far outpacing its industry’s 42% gain.
Over the last 12 months, SFM has skyrocketed 150%, surpassing its industry’s 30% climb and the S&P 500’s 8% gain, while Target fell -45% and Amazon dipped -5%.
SFM has climbed 25% YTD, compared to the S&P 500’s -8% decline. Yet, the stock trades 10% below its recent highs. SFM has rebounded after finding support near its post-Q3 earnings breakout levels and its December lows.
It is now above its 50-day moving average and well below overbought RSI levels, while remaining far from overheated on a 10-year scale.
SFM’s strong earnings growth is reflected in its 2.1 price-to-earnings-to-growth (PEG) ratio, which marks a 50% discount to its 10-year highs and 25% value to its industry.
Sprouts generated $645.2 million in operating cash flow last year, up 38% YoY and 76% above its 2021 figure. This strong cash position enabled SFM to self-fund $200 million in capital expenditures and return $238 million to shareholders through buybacks.
While no company is immune to tariff concerns, Sprouts makes a compelling case for both near-term stability and long-term growth, making it a top pick for investors.
Lennar Corp. is one of the largest U.S. homebuilders.
LEN stock has tanked roughly 45% from its September highs as its earnings estimates plummet amid a slowing housing market and persistent inflation across many critical aspects of its business.
Lennar Corporation is a top U.S. homebuilder focused on what it calls affordable, move-up, and active adult homes. Its financial services segment offers mortgage financing, title, closing services, and more for Lennar homebuyers. On top of that, Lennar develops high-quality multifamily rental properties across the country.
The company is attempting to navigate challenges plaguing the entire homebuilding industry and housing market more broadly.
Lingering inflation took a toll on Lennar’s margins throughout fiscal 2024 and into Q1 FY25, which it reported on March 20.
Lennar closed Q1 fiscal 2025 with a gross margin on home sales of 18.7%, down 310 basis points (bps) YoY. The decline was mainly due to decreased revenue per square foot and increased land costs. Higher sales incentives and mortgage rate buydowns, which Lennar used to combat affordability challenges, also impacted margins.
The company’s fiscal 2025 consensus earnings estimate tanked 18% since its first quarter release, with its FY26 estimate 26% lower.
Lennar’s downward EPS revision trends extended a rough stretch that heated up after its Q4 FY24 release. “Our first quarter was marked by a challenging macroeconomic environment for homebuilding,” Co-CEO Stuart Miller said in prepared remarks.
“While demand remains strong, persistently higher interest rates and inflation, combined with a downturn in consumer confidence and a limited supply of affordable homes, made it increasingly difficult for consumers to access homeownership.”
Lennar’s negative earnings estimate revisions help it land a Zacks Rank #5 (Strong Sell). The stock is down roughly 45% from its highs, including a 25% YTD drop.
LEN’s rough performance pushed it below its 200-week moving average and to its most oversold RSI levels in the past decade.
Some investors might think about dipping their toes into Lennar at these levels. But it is a risky time to attempt to call a bottom on hard-hit Lennar stock until there are signs that the tides might start turning across the broader homebuilder market.
Consumer sentiment is hitting rock bottom on fears that the economy could slip into a recession after President Donald Trump announced sweeping tariffs against all nations trading with the United States.
Inflation declined marginally in March but it is unlikely that the Federal Reserve will resume its interest rate cuts immediately, as the central bank prefers to wait and watch the economic situation for some time before taking a decision.
Given this situation, it would be wise to invest in safe-haven stocks like consumer staples. In this regard, Carriage Services, Inc., Reed's, Inc. and BellRing Brands, Inc. are lucrative buys. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The stocks are also from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a favorable Zacks Rank.
Consumer sentiment fell to 50.8 in April, declining 10.9% from March’s final reading of 57 and also lower than the consensus estimate of a reading of 54.6, the University of Michigan survey showed. April’s reading is 34.2% below the year-ago levels. This is also the lowest reading since June 2022 and the second-lowest ever since 1952.
The five-year inflation outlook jumped 0.3% to 4.4%, the highest level since June 1991. The current economic conditions index declined 11.4% to 56.5 in April, from the prior month. The expectations index dropped 10.3% from March to 47.2 in April and hit its lowest level since May 1980.
Trump’s tariffs have already rattled markets. The President announced a baseline 10% tariff on all trading partners of the United States last week and a whopping 145% tariff on Chinese imports. Wall Street saw $6.2 trillion wiped out of markers in just two sessions following the announcement.
Trump, a day later, announced a temporary 90-day pause on tariffs on all countries, with the exception of China. Stocks rebounded, with indexes making historic gains. However, the fears haven’t subsided as the halt is temporary and investors are still unclear on how Trump plans to move forward with the tariffs.
Moreover, high inflation remains a cause of concern. Inflation declined unexpectedly in March but the fears of an economic slowdown are far from over. The consumer price index (CPI) declined 0.1% sequentially in March after climbing 0.2% in February. This was the first time that the CPI declined since May 2020.
The Federal Reserve has adopted a cautious approach and halted interest rate cuts in January after inflation showed signs of increasing. Fed officials are likely to maintain this stance until they are more confident that inflation is declining and go for a rate cut only after that. The uncertainties are likely to keep markets volatile for a longer period.
Carriage Services is a leading provider of death care services and products in the United States. CSV provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.
Carriage Services has an expected earnings growth rate of 21.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the past 60 days. CSV presently sports a Zacks Rank #1. Carriage Services has a beta of 0.77.
Reed's, Inc. develops, manufactures and markets top-selling sodas in natural foods markets and will is currently expanding its innovative, all natural, non-alcoholic beverages, candies and ice creams into the mainstream markets. REED’s non-alcoholic Ginger Brews are unique in the beverage industry being brewed from fresh ginger, spices and fruits.
Reed's has an expected earnings growth rate of 96.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 33.3% over the past 60 days. REED presently has a Zacks Rank #2 and a beta of 0.62.
BellRing Brands, Inc. manufactures and sells nutrition products. BRBR offers protein shakes, other RTD beverages, powders and nutrition bars and supplements. It offers products under the Premier Protein, Dymatize and PowerBar, as well as Joint Juice and Supreme Protein brands.
BellRing Brands has an expected earnings growth rate of 16.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. BRBR presently has a Zacks Rank #2 and a beta of 0.78.
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This article originally published on Zacks Investment Research (zacks.com).
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