Zacks Investment Research Lowers Kroger (KR) to Hold

Zacks Investment Research cut shares of Kroger (NYSE:KR) from a buy rating to a hold rating in a research report sent to investors on Wednesday morning.

According to Zacks, “Kroger has been trying all means to overcome stiff competition, which has intensified with the entrance of Amazon, volatility in food prices, promotional environment and dwindling store traffic. The company is expanding store base, introducing new items, digital coupons, and order online, pick up in store initiative. The company’s “Restock Kroger” program is gaining traction. The company's operational strategies present enormous opportunities to augment identical supermarket sales and enhance return on invested capital. These endeavors facilitated Kroger to post better-than-expected third-quarter fiscal 2017 results, wherein both the top and bottom lines grew year over year. This provided a much needed boost to the stock that outpaced the industry in three months. However, higher investments in new services and compelling pricing strategy may hurt margins. Further, a high debt load may impact credit worthiness.”

A number of other equities analysts have also recently commented on the company. Oppenheimer reiterated a buy rating and issued a $28.00 target price on shares of Kroger in a report on Tuesday, September 5th. Deutsche Bank cut Kroger from a buy rating to a hold rating and dropped their target price for the stock from $26.00 to $21.00 in a report on Monday, September 11th. Goldman Sachs Group reiterated a neutral rating and issued a $22.00 target price on shares of Kroger in a report on Tuesday, November 14th. Wells Fargo & Co reiterated an outperform rating and issued a $26.00 target price on shares of Kroger in a report on Friday, November 3rd. Finally, Royal Bank of Canada reiterated an overweight rating on shares of Kroger in a report on Thursday, September 7th. Seventeen investment analysts have rated the stock with a hold rating, eleven have assigned a buy rating and one has assigned a strong buy rating to the company’s stock. The stock has an average rating of Hold and a consensus price target of $29.80.

Kroger (NYSE:KR) opened at $27.32 on Wednesday. The company has a market capitalization of $23,779.14, a P/E ratio of 16.26, a PEG ratio of 3.56 and a beta of 0.91. The company has a quick ratio of 0.31, a current ratio of 0.85 and a debt-to-equity ratio of 2.11. Kroger has a 1-year low of $19.69 and a 1-year high of $34.99.

Kroger (NYSE:KR) last announced its earnings results on Thursday, November 30th. The company reported $0.44 EPS for the quarter, topping the Zacks’ consensus estimate of $0.40 by $0.04. The firm had revenue of $27.75 billion during the quarter, compared to analysts’ expectations of $27.48 billion. Kroger had a return on equity of 28.60% and a net margin of 1.31%. The company’s quarterly revenue was up 4.5% on a year-over-year basis. During the same quarter in the previous year, the business earned $0.41 EPS. research analysts forecast that Kroger will post 2.03 earnings per share for the current year.

In other news, VP Michael Joseph Donnelly sold 15,400 shares of the business’s stock in a transaction on Thursday, December 28th. The stock was sold at an average price of $27.66, for a total value of $425,964.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, VP Carin L. Fike sold 1,538 shares of the business’s stock in a transaction on Friday, December 1st. The stock was sold at an average price of $25.61, for a total value of $39,388.18. Following the completion of the transaction, the vice president now directly owns 25,956 shares of the company’s stock, valued at $664,733.16. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 58,868 shares of company stock valued at $1,607,426. 0.85% of the stock is currently owned by corporate insiders.

Several institutional investors and hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. raised its position in shares of Kroger by 1.2% in the 2nd quarter. Vanguard Group Inc. now owns 69,201,771 shares of the company’s stock worth $1,613,786,000 after acquiring an additional 852,864 shares in the last quarter. FMR LLC grew its stake in Kroger by 17.7% during the 2nd quarter. FMR LLC now owns 49,409,616 shares of the company’s stock worth $1,152,232,000 after buying an additional 7,446,349 shares during the last quarter. State Street Corp grew its stake in Kroger by 0.3% during the 2nd quarter. State Street Corp now owns 39,414,284 shares of the company’s stock worth $919,140,000 after buying an additional 100,796 shares during the last quarter. Franklin Resources Inc. grew its stake in Kroger by 8.2% during the 2nd quarter. Franklin Resources Inc. now owns 12,045,681 shares of the company’s stock worth $280,904,000 after buying an additional 908,078 shares during the last quarter. Finally, Janus Henderson Group PLC grew its stake in Kroger by 0.3% during the 3rd quarter. Janus Henderson Group PLC now owns 8,281,641 shares of the company’s stock worth $166,129,000 after buying an additional 21,381 shares during the last quarter. 79.59% of the stock is owned by hedge funds and other institutional investors.

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Kroger Company Profile

The Kroger Co (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates.

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