Cincinnati, Ohio-based The Kroger Co. (KR) operates as a food and drug retailer. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price-impact warehouses. With a market cap of $43.3 billion, it operates as one of the world's largest food retailers.
Although Kroger has slightly lagged behind the broader market over the past year, it has outperformed in 2024. KR stock has soared 30.8% on a YTD basis and 32.4% over the past year, compared to the S&P 500 Index’s ($SPX) surge of 24.3% on a YTD basis and 35.8% over the past 52-week period.
Narrowing the focus, KR stock has outpaced the Consumer Staples Select Sector SPDR Fund’s (XLP) 10.5% gains in 2024 and 15.5% returns over the past year.
Kroger stock prices soared 7.2% after the release of its Q2 earnings on Sep. 12. The boost came despite a marginal 17 basis point increase in sales to $33.9 billion, which missed Wall Street's Wall Street topline expectations. Moreover, the company reported a slight drop in adjusted EPS to $0.93. However, the company's significant improvement in GAAP profitability, with net income rising to $466 million compared to a loss of $180 million last year, caught investors' attention, driven in part by a previous year's $1.4 billion opioid settlement charge.
For the current fiscal year, ending in January 2025, analysts expect KR to report a 6.3% year-over-year dip in adjusted EPS to $4.46. However, the company has a robust earnings surprise history. It surpassed Wall Street’s bottom-line estimates in the past four trading sessions.
KR has a consensus “Moderate Buy” rating overall. Among the 18 analysts covering the stock, 10 suggest a “Strong Buy” and eight advise a “Hold” rating.
On Oct. 9, Telsey Advisory Group analyst Joseph Feldman maintained a “Buy” rating on KR with a price target of $62.
As of writing, Kroger is trading slightly above its mean price target of $59.61. The Street-high target of $72 suggests a potential upside of 20.4% from current price levels.
On the date of publication, Aditya Sarawgi 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.
