Zacks Investment Research Upgrades Kroger Company (The) (KR) to “Hold”

Kroger Company (The) (NYSE:KR) was upgraded by Zacks Investment Research from a “sell” rating to a “hold” rating in a report issued on Monday.

According to Zacks, “Stiff competition, volatility in food prices, aggressive promotional environment and waning store traffic are making things tough for Kroger that underperformed the industry in the past three months. This is quite evident from second-quarter fiscal 2017 results, wherein bottom line continues to decline year over year for the fourth straight quarter. On the contrary, top line continues to improve fueled by Customer 1st strategy, digital endeavors and recent buyouts, and also came ahead of the estimate for the fourth successive quarter. The company’s dominant position among grocery retailers enables it to sustain sales growth, expand store base and boost market share. However, higher investments in new services and compelling pricing strategy may hurt margins. Further, a high debt load also remains a concern. Management also reiterated its fiscal 2017 adjusted earnings guidance of $2.00-$2.05 per share down from the prior year.”

KR has been the subject of several other research reports. Royal Bank Of Canada set a $34.00 price target on shares of Kroger Company (The) and gave the company a “buy” rating in a research report on Monday, August 28th. Oppenheimer Holdings, Inc. downgraded shares of Kroger Company (The) to a “market perform” rating and reduced their price target for the company from $28.00 to $23.00 in a research report on Friday, September 8th. Jefferies Group LLC restated a “hold” rating on shares of Kroger Company (The) in a research report on Friday, August 25th. Deutsche Bank AG set a $26.00 price target on shares of Kroger Company (The) and gave the company a “buy” rating in a research report on Monday, June 19th. Finally, ValuEngine downgraded shares of Kroger Company (The) from a “buy” rating to a “hold” rating in a research report on Friday, June 2nd. One equities research analyst has rated the stock with a sell rating, nineteen have assigned a hold rating, eight have issued a buy rating and one has assigned a strong buy rating to the company’s stock. The company has an average rating of “Hold” and an average price target of $28.58.

Kroger Company (KR) opened at 21.58 on Monday. The firm has a market capitalization of $19.36 billion, a P/E ratio of 12.99 and a beta of 0.79. Kroger Company has a one year low of $20.41 and a one year high of $36.44. The firm has a 50-day moving average price of $23.07 and a 200 day moving average price of $26.72.

Kroger Company (The) (NYSE:KR) last issued its quarterly earnings results on Friday, September 8th. The company reported $0.39 EPS for the quarter, meeting the Thomson Reuters’ consensus estimate of $0.39. The business had revenue of $27.60 billion during the quarter, compared to the consensus estimate of $27.48 billion. Kroger Company (The) had a net margin of 1.32% and a return on equity of 28.04%. The firm’s quarterly revenue was up 3.9% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.47 EPS. Equities research analysts anticipate that Kroger Company will post $1.97 earnings per share for the current year.

Kroger Company (The) declared that its board has initiated a share repurchase plan on Thursday, June 22nd that permits the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization permits the company to repurchase up to 4.9% of its stock through open market purchases. Stock repurchase plans are generally a sign that the company’s management believes its stock is undervalued.

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In other news, insider J Michael Schlotman bought 2,000 shares of the stock in a transaction that occurred on Monday, June 26th. The shares were acquired at an average cost of $22.73 per share, for a total transaction of $45,460.00. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Susan M. Phillips sold 6,200 shares of the firm’s stock in a transaction on Friday, June 16th. The shares were sold at an average price of $21.17, for a total transaction of $131,254.00. Following the completion of the transaction, the director now owns 124,105 shares in the company, valued at $2,627,302.85. The disclosure for this sale can be found here. Company insiders own 0.87% of the company’s stock.

A number of large investors have recently bought and sold shares of KR. BlackRock Inc. grew its stake in Kroger Company (The) by 3,334.2% in the 1st quarter. BlackRock Inc. now owns 72,026,662 shares of the company’s stock valued at $2,124,067,000 after buying an additional 69,929,316 shares during the last quarter. FMR LLC grew its stake in Kroger Company (The) by 54.1% in the 1st quarter. FMR LLC now owns 41,963,267 shares of the company’s stock valued at $1,237,497,000 after buying an additional 14,723,540 shares during the last quarter. CI Global Investments Inc. acquired a new position in Kroger Company (The) in the 1st quarter valued at $270,002,000. Vanguard Group Inc. grew its stake in Kroger Company (The) by 15.3% in the 1st quarter. Vanguard Group Inc. now owns 68,348,907 shares of the company’s stock valued at $2,015,609,000 after buying an additional 9,054,273 shares during the last quarter. Finally, Janus Henderson Group PLC grew its stake in Kroger Company (The) by 6,611.2% in the 2nd quarter. Janus Henderson Group PLC now owns 8,260,260 shares of the company’s stock valued at $192,630,000 after buying an additional 8,137,179 shares during the last quarter. Institutional investors and hedge funds own 74.63% of the company’s stock.

Kroger Company (The) Company Profile

The Kroger Co (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates.

Analyst Recommendations for Kroger Company (The) (NYSE:KR)

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