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Kroger (KR) Flat As Market Sinks: What You Should Know

Zacks Equity Research
·3 min read

Kroger (KR) closed the most recent trading day at $33.33, making no change from the previous trading session. This move was narrower than the S&P 500's daily loss of 0.22%. At the same time, the Dow lost 0.35%, and the tech-heavy Nasdaq lost 0.28%.

Prior to today's trading, shares of the supermarket chain had lost 1.22% over the past month. This has lagged the Retail-Wholesale sector's gain of 8.23% and the S&P 500's gain of 3.82% in that time.

Investors will be hoping for strength from KR as it approaches its next earnings release. The company is expected to report EPS of $0.65, up 38.3% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $29.97 billion, up 7.12% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.28 per share and revenue of $132.36 billion, which would represent changes of +49.09% and +8.24%, respectively, from the prior year.

Any recent changes to analyst estimates for KR should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 0.24% higher. KR is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, KR currently has a Forward P/E ratio of 10.17. This valuation marks a discount compared to its industry's average Forward P/E of 15.46.

Investors should also note that KR has a PEG ratio of 1.64 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. KR's industry had an average PEG ratio of 2.52 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 75, which puts it in the top 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KR in the coming trading sessions, be sure to utilize Zacks.com.

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Zacks Investment Research