Zacks Investment Research lowered shares of Kroger (NYSE:KR) from a buy rating to a hold rating in a research report report published 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.”
Several other equities analysts have also weighed in on the stock. Jefferies Group set a $31.00 price target on shares of Kroger and gave the company a buy rating in a research report on Monday, March 12th. Morgan Stanley set a $27.00 price target on shares of Kroger and gave the company a hold rating in a research report on Monday, March 12th. Pivotal Research restated a buy rating and set a $28.00 price target (down previously from $32.00) on shares of Kroger in a research report on Monday, March 12th. BMO Capital Markets set a $27.00 price target on shares of Kroger and gave the company a hold rating in a research report on Monday, March 12th. Finally, Bank of America reduced their price target on shares of Kroger from $33.00 to $28.00 and set a neutral rating for the company in a research report on Friday, March 9th. Seventeen investment analysts have rated the stock with a hold rating, ten have given a buy rating and one has assigned a strong buy rating to the company’s stock. The company has a consensus rating of Hold and an average target price of $27.27.
Kroger (KR) opened at $23.28 on Tuesday. The firm has a market cap of $20,615.05, a PE ratio of 11.47, a P/E/G ratio of 1.93 and a beta of 1.02. The company has a current ratio of 0.78, a quick ratio of 0.32 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 posted its quarterly earnings results on Thursday, March 8th. The company reported $0.63 earnings per share for the quarter, meeting the Thomson Reuters’ consensus estimate of $0.63. The company had revenue of $31.03 billion during the quarter, compared to analyst estimates 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 in the prior year, the business earned $0.53 earnings per share. equities analysts forecast that Kroger will post 2.06 EPS for the current year.
Kroger announced that its Board of Directors has initiated a share repurchase program on Thursday, March 15th that permits the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization permits the company to purchase shares of its stock through open market purchases. Shares repurchase programs are usually an indication that the company’s management believes its stock is undervalued.
The company also recently declared a quarterly dividend, which will be paid on Friday, June 1st. Stockholders of record on Tuesday, May 15th will be issued a $0.125 dividend. This represents a $0.50 dividend on an annualized basis and a dividend yield of 2.15%. The ex-dividend date of this dividend is Monday, May 14th. Kroger’s payout ratio is 23.70%.
In related news, VP Todd A. Foley sold 3,800 shares of the firm’s stock in a transaction that occurred on Thursday, March 8th. The shares were sold at an average price of $24.43, for a total value of $92,834.00. Following the sale, the vice president now directly owns 31,273 shares of the company’s stock, valued at $763,999.39. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Christopher T. Hjelm sold 8,000 shares of the firm’s stock in a transaction that occurred on Monday, January 29th. The shares were sold at an average price of $30.64, for a total transaction of $245,120.00. Following the completion of the sale, the insider now directly owns 251,784 shares in the company, valued at $7,714,661.76. The disclosure for this sale can be found here. Over the last three months, insiders sold 93,600 shares of company stock worth $2,740,752. Insiders own 0.85% of the company’s stock.
A number of institutional investors and hedge funds have recently made changes to their positions in KR. Advisory Services Network LLC raised its stake in Kroger by 297.2% in the fourth quarter. Advisory Services Network LLC now owns 3,773 shares of the company’s stock valued at $104,000 after purchasing an additional 2,823 shares in the last quarter. Compagnie Lombard Odier SCmA purchased a new stake in Kroger in the fourth quarter valued at approximately $119,000. Bessemer Group Inc. raised its stake in Kroger by 97.2% in the fourth quarter. Bessemer Group Inc. now owns 4,980 shares of the company’s stock valued at $136,000 after purchasing an additional 2,455 shares in the last quarter. Gradient Investments LLC purchased a new stake in Kroger in the fourth quarter valued at approximately $152,000. Finally, Clear Perspective Advisors LLC purchased a new stake in Kroger in the third quarter valued at approximately $160,000. 75.68% of the stock is currently owned by institutional investors and hedge funds.
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Kroger 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.
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