Kroger (KR) Cut to “Hold” at Zacks Investment Research

Kroger (NYSE:KR) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued on Tuesday.

According to Zacks, “Kroger is trying all means to overcome competition, volatility in food prices and promotional environment. It is introducing new items, digital coupons, order online pick up in store and smart shopping lists. The company's “Restock Kroger” program is gaining traction. The company's operational strategies present opportunities to improve identical supermarket sales and return on invested capital. These efforts are likely to fuel top and bottom-line growth, as evident from fourth-quarter fiscal 2017 results. In our view, Kroger’s earnings per share growth rate target of 8-11% seem achievable. All these are likely to cushion the stock that came under pressure and underperformed the industry in the past three months due to soft fiscal 2018 earnings view. Further, we note that higher investments in new services and compelling pricing strategy may hurt margins. Additionally, a high debt load may also impact credit worthiness.”

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Several other equities research analysts have also recently weighed in on the stock. Citigroup raised their price objective on shares of Kroger from $30.00 to $33.00 and gave the company a “buy” rating in a research report on Tuesday, December 26th. ValuEngine cut shares of Kroger from a “buy” rating to a “hold” rating in a research report on Friday, February 2nd. Jefferies Group upgraded shares of Kroger from a “hold” rating to a “buy” rating and raised their price objective for the company from $26.98 to $33.00 in a research report on Friday, January 5th. TheStreet upgraded shares of Kroger from a “c+” rating to a “b” rating in a research report on Wednesday, December 27th. Finally, Wolfe Research upgraded shares of Kroger from an “underperform” rating to a “market perform” rating in a research report on Wednesday, December 20th. Seventeen analysts have rated the stock with a hold rating, ten have given a buy rating and one has issued a strong buy rating to the company’s stock. Kroger currently has a consensus rating of “Hold” and an average price target of $27.27.

Shares of Kroger (NYSE KR) traded up $0.25 during trading on Tuesday, hitting $23.41. 4,208,604 shares of the company were exchanged, compared to its average volume of 11,418,228. The firm has a market cap of $20,879.46, a PE ratio of 11.09, a P/E/G ratio of 1.96 and a beta of 1.02. The company has a quick ratio of 0.32, a current ratio of 0.78 and a debt-to-equity ratio of 1.74. Kroger has a 1-year low of $19.69 and a 1-year high of $31.45.

Kroger (NYSE:KR) last announced its earnings results on Thursday, March 8th. The company reported $0.63 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.63. The business had revenue of $31.03 billion during the quarter, compared to analysts’ expectations of $30.81 billion. Kroger had a net margin of 1.55% and a return on equity of 29.27%. The firm’s revenue for the quarter was up 12.4% on a year-over-year basis. During the same quarter last year, the company posted $0.53 EPS. equities analysts predict that Kroger will post 2.07 EPS for the current year.

Kroger declared that its board has approved a stock buyback plan on Thursday, March 15th that authorizes the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization authorizes the company to purchase shares of its stock through open market purchases. Stock repurchase plans are typically an indication that the company’s board of directors believes its shares are undervalued.

In other news, insider Robert W. Clark sold 11,000 shares of the business’s stock in a transaction dated Monday, January 22nd. The shares were sold at an average price of $29.57, for a total value of $325,270.00. Following the completion of the sale, the insider now owns 130,780 shares of the company’s stock, valued at $3,867,164.60. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, VP Michael Joseph Donnelly sold 15,400 shares of the business’s stock in a transaction dated Thursday, December 28th. The shares were sold at an average price of $27.66, for a total transaction of $425,964.00. The disclosure for this sale can be found here. Over the last quarter, insiders sold 93,600 shares of company stock worth $2,740,752. Corporate insiders own 0.87% of the company’s stock.

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Sanders Capital LLC acquired a new stake in Kroger during the 4th quarter valued at approximately $293,538,000. Artisan Partners Limited Partnership acquired a new stake in shares of Kroger during the 3rd quarter worth approximately $119,454,000. Amundi Pioneer Asset Management Inc. acquired a new stake in shares of Kroger during the 4th quarter worth approximately $89,873,000. Alliancebernstein L.P. grew its position in shares of Kroger by 70.1% during the 4th quarter. Alliancebernstein L.P. now owns 4,645,757 shares of the company’s stock worth $127,526,000 after buying an additional 1,914,070 shares during the period. Finally, Minneapolis Portfolio Management Group LLC acquired a new stake in shares of Kroger during the 4th quarter worth approximately $49,450,000. 75.68% of the stock is owned by institutional investors and hedge funds.

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About Kroger

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 (NYSE:KR)

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