Intelligent question? I dont know. But before we continue we first better make sure what we are talking about: Here is the definition of a sheep according to wikipedia, for those of you who dont know what we are talking about:
The domestic sheep (Ovis aries), the most common species of the sheep genus (Ovis), is a woolly ruminant quadruped which probably descends from the wild mouflon of south-central and south-west Asia. Sheep breeders refer to female sheep as ewes, intact males as rams, castrated males as wethers, yearlings as hoggets, and younger sheep as lambs. In sheep husbandry, a group of sheep is called a flock or mob.
Which still doesnt explain the sheeps intelligence but according to a spokesperson of the British National Sheep Association, "Sheep are quite intelligent creatures and have more brainpower than people are willing to give them credit for." For example, sheep in Yorkshire, England found a way to get over cattle grids by rolling on their backs. A study published in National Geographic showed a sheep can remember the faces of fifty other sheep for over two years.
But in my humble opinion the best source of information will always be the farmer who works with them. Donald Fletcher at the Persabus Farm gave a radio interview recently explaining the intelligence of the sheep and according to this interview sheep dont only recognise faces but it seems they have a particular good memory for Bruichladdich Malt. Click here to listen to the interview (opens your mp3 player)