Morgan Stanley's Vincent Sinisi downgraded Sprouts' stock rating from Overweight to Equal Weight with an unchanged $23 price target. While the analyst reiterated the organic food retailer's favorable outlook, the stock is now trading at a 25x multiple on his 2018 earnings per share estimate. This represents a 12-month high for the stock and a 25-percent premium to the food retail group Sinisi covers (check out Sinisi's track record here).

Sprouts remains a strong retailer in the organic food segment as it sells low-price produce which serves as a compelling differentiator for customers, Sinisi explained. Meanwhile, Sprouts happens to be the only company within the analyst's coverage to report positive comps throughout the grocery deflationary cycle, but a return to 2012 to 2014's comp average of 10 percent is unlikely to be seen again, especially when factoring in the competitive environment. Related Links: Whole Foods CEO Says Jana Partners Is Out To 'Destroy' His Reputation, Spread Propaganda Could Albertsons Finally Go Public With Alleged Whole Foods Bid?