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Kroger (KR) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
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Kroger (KR) closed the most recent trading day at $25.58, moving -0.78% from the previous trading session. This change lagged the S&P 500's 0.75% loss on the day. At the same time, the Dow lost 0.61%, and the tech-heavy Nasdaq lost 0.57%.

Heading into today, shares of the supermarket chain had gained 8.5% over the past month, outpacing the Retail-Wholesale sector's gain of 3.67% and the S&P 500's gain of 4% in that time.

KR will be looking to display strength as it nears its next earnings release. On that day, KR is projected to report earnings of $0.73 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $36.88 billion, down 1.73% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.22 per share and revenue of $122.14 billion. These totals would mark changes of +5.21% and +0.81%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for KR. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.27% lower. KR is currently a Zacks Rank #3 (Hold).

Looking at its valuation, KR is holding a Forward P/E ratio of 11.61. Its industry sports an average Forward P/E of 15.17, so we one might conclude that KR is trading at a discount comparatively.

Meanwhile, KR's PEG ratio is currently 1.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 1.45 based on yesterday's closing prices.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 40, which puts it in the top 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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