Deutsche Bank Says Recent Checks Confirm Kroger's 'Strong Price Positioning'
In a report published Thursday, Deutsche Bank analyst Karen Short conducted price checks in Denver, which showed that Kroger Co (NYSE: KR) remains "very competitively" priced versus both Whole Foods Market, Inc. (NASDAQ: WFM) and Sprouts Farmers Market Inc (NASDAQ: SFM)
"These results reaffirm our view that Kroger's price/value position remains very strong, so Kroger's many competitive advantages should support sustainable growth," Short wrote. "Specifically, Kroger can react to pockets of intrusion by category (natural-organic) or by geography and the impact to Kroger's earnings power is almost undetectable."
Kroger's price competitive ability stems from its "very" large scale, strong local market share positions, deep private brand portfolio and extensive customer loyalty program, augmented by its partnership with consumer-analysis firm Dunnhumby.
Short said that Kroger's many competitive advantages should support a sustainable sales and earnings growth for years. As such, the analyst suggested that shares should trade more in-line with other best-in-class operators and consumer staples such as Costco Wholesale Corporation and Wal-Mart Stores, Inc.
Shares remain Buy rated with a price target raised to $90 from a previous $80.
Latest Ratings for KR
Mar 2015 | Deutsche Bank | Maintains | Buy | |
Mar 2015 | Citigroup | Maintains | Buy | |
Mar 2015 | Deutsche Bank | Maintains | Buy |
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