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Kroger Hits New 52-Week High

Zacks Equity Research

Shares of The Kroger Company (KR) recorded the fourth 52-week high in a month's span. We note that the company’s share price has been rising consistently since it reported solid fourth-quarter fiscal 2012 results on Mar 7.

After attaining a high of $33.25 on Mar 27, shares of this grocery retailer further soared to touch a new high of $33.50 yesterday.

Shares eventually closed at $33.17, rising roughly 26.5% year to date. Kroger currently trades at a forward P/E of 12.00x, a 2.6% discount to the peer group average of 12.34x. Moreover, the company’s long-term estimated EPS growth rate is 9.2%, which is relatively healthy.

Alongside, other retailers like Macy’s Inc. (M), Target Corporation (TGT) and Tiffany & Co. (TIF) crafted new 52-week highs of $45.26, $69.91 and $74.20 yesterday.

Kroger’s dominant position among the nation’s largest grocery retailers enables it to sustain growth in top and bottom lines, expand its store base, and boost its market share.

Moreover, Kroger’s Customer 1st strategy provides a strong value proposition to consumers. The company’s value offerings further facilitate it to retain customers and in turn generate identical supermarket sales growth.

These measures help the company to continue to perform well and post better-than-expected results. If we look at the company’s earnings surprise history, Kroger has outpaced the Zacks Consensus Estimate in the last 4 quarters by an average of 11.3%.

Going forward, Kroger envisions fiscal 2013 earnings between $2.71 and $2.79 per share, reflecting year-over-year growth in the range of 8% to 11%. Moreover, Kroger now expects identical supermarket sales (excluding fuel) growth of 2.5% – 3.5% for fiscal 2013.

Currently, Kroger holds a Zacks Rank #2 (Buy).

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