The Kroger Company (KR), based in Cincinnati, Ohio, is one of the world's largest food retailers. With a market cap of $37.8 billion, it operates various formats, including supermarkets, price-impact warehouse stores, multi-department stores, convenience stores, fine jewelry stores, and supermarket fuel centers.
Shares of the supermarket chain have lagged behind the broader market in the last year. While KR has surged 10.6% over this time frame, the broader S&P 500 Index ($SPX) has rallied by 26.2%. However, in 2024, the stock rose 14.4%, outpacing SPX’s 11.2% return on a YTD basis.
Narrowing the focus, Kroger has outperformed the S&P 500 Cons Staples Sector SPDR (XLP) over the past year. The exchange-traded fund has gained 4.2%, compared to KR’s double-digit returns for the period.
Kroger's stock has taken a hit in the past year due to challenges stemming from its widely publicized merger with Albertsons. The merger has encountered significant legal hurdles, with at least three lawsuits filed against it, including one by the Federal Trade Commission aimed at halting the acquisition.
For the current fiscal year, ending in January 2025, analysts expect KR’s EPS to decline 6.9% year over year to $4.43. However, the company’s earnings surprise history is promising. It surpassed the consensus estimates in each of the last four quarters.
Kroger stock has a consensus “Moderate Buy” rating overall. Out of 17 analysts covering the stock, eight recommend a "Strong Buy," eight suggest a "Hold," and the remaining one advises a “Strong Sell.”
The consensus rating is slightly more bullish than two months before, with seven analysts suggesting a “Strong Buy.”
Wells Fargo upgraded Kroger from an “Equal-Weight” to an “Overweight” rating and increased the price target from $58 to $65, indicating renewed confidence in the company's market position and growth potential. The new price target implies an upside potential of 24.3% from the stock’s current price level.
The mean price target of $57.69 suggests a 10.3% premium to KR’s current price levels. The Street-high target of $70 represents an upside potential of 33.8%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
