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

Zacks Equity Research
·3 mins read

Kroger (KR) closed at $33.98 in the latest trading session, marking a +0.41% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.15%. Elsewhere, the Dow lost 0.07%, while the tech-heavy Nasdaq lost 0.47%.

Heading into today, shares of the supermarket chain had gained 5.68% over the past month, lagging the Retail-Wholesale sector's gain of 6.56% and outpacing the S&P 500's gain of 3.19% in that time.

KR will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.65, up 38.3% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $29.97 billion, up 7.12% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.28 per share and revenue of $132.36 billion. These totals would mark changes of +49.09% and +8.24%, respectively, from last year.

Any recent changes to analyst estimates for KR should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.25% higher within the past month. KR is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, KR currently has a Forward P/E ratio of 10.33. For comparison, its industry has an average Forward P/E of 15.13, which means KR is trading at a discount to the group.

Meanwhile, KR's PEG ratio is currently 1.67. 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 was holding an average PEG ratio of 2.54 at yesterday's closing price.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 19, which puts it in the top 8% 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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