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

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Zacks Equity Research
·3 min read
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Kroger (KR) closed at $33.28 in the latest trading session, marking a +0.39% move from the prior day. The stock lagged the S&P 500's daily gain of 0.74%. Meanwhile, the Dow gained 0.76%, and the Nasdaq, a tech-heavy index, added 0.95%.

Heading into today, shares of the supermarket chain had gained 4.18% over the past month, lagging the Retail-Wholesale sector's gain of 4.59% and the S&P 500's gain of 4.41% in that time.

Wall Street will be looking for positivity from KR as it approaches its next earnings report date. In that report, analysts expect KR to post earnings of $0.69 per share. This would mark year-over-year growth of 21.05%. Our most recent consensus estimate is calling for quarterly revenue of $31.01 billion, up 7.33% from the year-ago period.

It is also important to note the recent changes to analyst estimates for KR. These recent revisions tend to reflect the evolving nature of short-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. 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 0.86% lower. KR currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that KR has a Forward P/E ratio of 12.36 right now. This valuation marks a discount compared to its industry's average Forward P/E of 21.47.

We can also see that KR currently has a PEG ratio of 1.95. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Supermarkets industry currently had an average PEG ratio of 2.62 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 102, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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