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Kroger (KR) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Kroger (KR) closed at $23.51, marking a +1.69% move from the previous day. This move outpaced the S&P 500's daily gain of 0.66%. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq added 0.38%.

Prior to today's trading, shares of the supermarket chain had gained 7.89% over the past month. This has outpaced the Retail-Wholesale sector's loss of 4.56% and the S&P 500's loss of 5.01% in that time.

Wall Street will be looking for positivity from KR as it approaches its next earnings report date. The company is expected to report EPS of $0.42, up 2.44% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $28.42 billion, up 1.98% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.17 per share and revenue of $122.88 billion, which would represent changes of +2.84% and +1.41%, respectively, from the prior year.

Any recent changes to analyst estimates for KR should also be noted by investors. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. KR currently has a Zacks Rank of #3 (Hold).

Digging into valuation, KR currently has a Forward P/E ratio of 10.63. This represents a discount compared to its industry's average Forward P/E of 12.35.

It is also worth noting that KR currently has a PEG ratio of 1.64. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 2.07 based on yesterday's closing prices.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 27% 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.

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


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