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

Zacks Equity Research

Kroger (KR) closed the most recent trading day at $21.69, moving +0.14% from the previous trading session. This change outpaced the S&P 500's 0.62% loss on the day. At the same time, the Dow lost 0.25%, and the tech-heavy Nasdaq lost 0.74%.

Prior to today's trading, shares of the supermarket chain had lost 6.36% over the past month. This has lagged the Retail-Wholesale sector's gain of 3.8% and the S&P 500's gain of 2.8% 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 $0.42, up 2.44% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $28.42 billion, up 1.98% from the year-ago period.

KR's full-year Zacks Consensus Estimates are calling for earnings of $2.18 per share and revenue of $122.79 billion. These results would represent year-over-year changes of +3.32% and +1.35%, respectively.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.46% lower. KR currently has a Zacks Rank of #3 (Hold).

Digging into valuation, KR currently has a Forward P/E ratio of 9.95. Its industry sports an average Forward P/E of 14.49, so we one might conclude that KR is trading at a discount comparatively.

Meanwhile, KR's PEG ratio is currently 1.53. 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. The Retail - Supermarkets was holding an average PEG ratio of 1.54 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 102, which puts it in the top 40% 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.

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


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