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Kroger (KR) Gains As Market Dips: What You Should Know

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Kroger (KR) closed the most recent trading day at $52.97, moving +0.02% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.63%. Meanwhile, the Dow lost 0.67%, and the Nasdaq, a tech-heavy index, lost 0.15%.

Coming into today, shares of the supermarket chain had lost 1.41% in the past month. In that same time, the Retail-Wholesale sector lost 5.45%, while the S&P 500 gained 0.89%.

Kroger will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.27, up 6.72% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $43.22 billion, up 4.65% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.83 per share and revenue of $142.23 billion, which would represent changes of +4.08% and +3.15%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Kroger. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 2.09% higher. Kroger is currently a Zacks Rank #2 (Buy).

In terms of valuation, Kroger is currently trading at a Forward P/E ratio of 13.82. Its industry sports an average Forward P/E of 11.13, so we one might conclude that Kroger is trading at a premium comparatively.

We can also see that KR currently has a PEG ratio of 1.4. 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 1.4 based on yesterday's closing prices.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 232, putting it in the bottom 8% 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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