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Kroger (KR) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 mins read

Kroger (KR) closed the most recent trading day at $34.45, moving +0.47% from the previous trading session. This change lagged the S&P 500's 0.88% gain on the day. Meanwhile, the Dow gained 0.57%, and the Nasdaq, a tech-heavy index, added 1.39%.

Heading into today, shares of the supermarket chain had lost 1.3% over the past month, lagging the Retail-Wholesale sector's gain of 4.88% and the S&P 500's gain of 3.54% in that time.

KR will be looking to display strength as it nears its next earnings release. In that report, analysts expect KR to post earnings of $0.65 per share. This would mark year-over-year growth of 38.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $29.97 billion, up 7.12% from the year-ago period.

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.

It is also important to note the recent changes to analyst estimates for KR. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 14.35% higher. KR is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note KR's current valuation metrics, including its Forward P/E ratio of 10.47. This valuation marks a discount compared to its industry's average Forward P/E of 17.28.

Investors should also note that KR has a PEG ratio of 1.69 right now. 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. KR's industry had an average PEG ratio of 2.51 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 32, putting it in the top 13% 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.

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

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