Kroger Co hits 20-day low amid market strength
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 26 2024
0mins
Should l Buy KR?
Source: Benzinga
Kroger Co's stock price fell by 3.01% today, hitting a 20-day low. This decline occurs despite the broader market's positive performance, with the Nasdaq-100 up 0.56% and the S&P 500 up 0.15%.
The drop in Kroger's stock is attributed to sector rotation, as the company faces challenges despite its recent initiatives to enhance customer loyalty and community contributions. Notably, Kroger reported significant savings for customers through its Yearly Checkout feature, which is expected to drive future sales growth. However, the stock's performance reflects a shift in investor focus away from grocery retail amid broader market gains.
This situation suggests that while Kroger is making strides in customer engagement and social responsibility, the stock's current trajectory may be influenced by external market dynamics, indicating a need for the company to adapt to changing investor sentiments.
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Analyst Views on KR
Wall Street analysts forecast KR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KR is 75.00 USD with a low forecast of 68.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
9 Buy
6 Hold
0 Sell
Moderate Buy
Current: 66.670
Low
68.00
Averages
75.00
High
85.00
Current: 66.670
Low
68.00
Averages
75.00
High
85.00
About KR
The Kroger Co. is a food and drug retailer. The Company operates supermarkets, multi-department stores and fulfillment centers throughout the United States. It operates approximately 2,731 supermarkets, 2,273 pharmacies and 1,702 fuel centers in over 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale in its supermarkets and online. It offers Pickup and Harris Teeter ExpressLane personalized, order online, pick-up at the store services at approximately 2,412 of its supermarkets and provides delivery, which allows it to offer digital solutions to substantially all of its customers. Its delivery solutions include orders delivered to customers at retail store locations, customer fulfillment centers and orders placed through third-party platforms. The Company also offers customer-facing apps and interfaces.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Replay Availability: An on-demand replay of the webcast will be available approximately at 1:00 p.m. ET on March 5, 2026, enabling investors who cannot attend live to access key information, thereby enhancing communication between the company and its stakeholders.
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- Capital Flow Changes: Goldman Sachs equity strategist Ben Snider indicates that capital is rotating towards sectors perceived as insulated from AI disruption, marking a clear departure from last year's market strategies and reflecting diminished investor confidence in AI themes.
- Cyclical Industry Rally: Despite software stocks experiencing one of their worst weeks since the 2022 rate-hike panic, cyclical and consumer-linked industries have continued their recent rallies, indicating a growing preference for traditional sectors among investors.
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- Live Streaming Platform: The event will be broadcast live on Kroger's website under the 'Quarterly Results' section, ensuring that investors and analysts can access real-time updates, thereby enhancing transparency and communication efficiency.
- Replay Availability: An on-demand replay of the conference will be available at approximately 1:00 p.m. ET on March 5, 2026, allowing investors who cannot attend live to catch up on the discussions, thus improving information accessibility.
- Company Background: Kroger employs over 400,000 associates and serves more than 11 million customers daily, committed to achieving 'Zero Hunger, Zero Waste' communities through food inspiration and uplift, highlighting its significant role in the industry.
See More
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- Low Industry Valuations: Excluding giants like Walmart and Costco, Kroger Company (KR) trades at 12.7x forward earnings estimates, significantly below the S&P 500, indicating a cautious market sentiment reflected in the grocery sector's average valuation of just 11.3x.
- Stagnant Revenue Growth: Over the past five years, revenues at major grocery chains have barely budged, with inflation-adjusted figures showing declines; Kroger's net income margin is projected at only 2.1% for FY 2026, while Albertson's (ACI) is even narrower at 1.4%.
- Emerging Market Opportunities: Sprouts Farmers Market (SFM) is forecasted to achieve approximately 10% revenue growth in FY 2026 with a net income margin of 5.7%, highlighting its competitive edge in the natural and organic food sector against traditional grocers.
- Attractive Options Strategy: Given SFM's recent weak stock performance, investors can sell cash-secured puts to earn about 5% returns; if the stock remains above $65 by expiration, profits are realized, while a drop allows acquisition at a discount, showcasing the appeal of value investing.
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