Based in Cincinnati, Ohio, The Kroger Co. (KR) operates as a food and drug retailer. Valued at $35.64 billion by market cap, the company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and KR perfectly fits into that category, signifying its substantial size, stability, and dominance in its industry.
The retail major has fallen 15.4% from its 52-week high of $58.34, which it hit on Apr. 3. Shares of KR are down 13.4% over the past three months, underperforming the Dow Jones Industrials Average’s ($DOWI) 1.3% losses over the same time frame.
Longer term, KR shares have risen 5.3% over the past year, and in 2024, the stock is up 7.8%. By contrast, DOWI is up 4.1% on a YTD basis and 15.6% over the past 52 weeks.
The stock has been trading below its 50-day moving average since mid-May but above its 200-day moving average since mid-February.
On Jun. 20, KR shares closed down more than 3% after the company reported its Q1 results. Its adjusted EPS was $1.43, beating the consensus estimates of $1.33, and its revenue of $45.27 billion surpassed the Wall Street forecasts of $45.05 billion. The company expects its full-year adjusted EPS forecast to be between $4.30 and $4.50, but the midpoint is below the consensus of $4.43.
KR’s overall performance can be attributed to its solid start to 2024. The company beat the consensus estimates for adjusted EPS and revenue. The robust Q1 performance led it to reaffirm its guidance for the full year. CEO Rodney McMullen expects softness in Health & Wellness in the current quarter before recovering during the second half of the year. McMullen also mentioned that positive momentum was returning to budget-conscious households.
Rival Walmart Inc. (WMT) has outperformed KR. WMT stock has gained 32.7% in the past 52 weeks and is up 30% on a YTD basis.
Despite its recent underperformance compared to DOWI, analysts are optimistic about KR’s prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it, and the mean price target of $57.50 is a premium of 16.4% to current levels.
On the date of publication, Dipanjan Banchur 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.
