Zacks Investment Research Downgrades Kroger Company (The) (NYSE:KR) to Strong Sell

Kroger Company (The) (NYSE:KR) was downgraded by Zacks Investment Research from a “hold” rating to a “strong sell” rating in a research note issued on Monday, October 16th.

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 efforts and recent buyouts, and also came ahead of the estimate for the fourth quarter in row. The company’s dominant position among grocery retailers enables it to sustain sales growth. However, higher investments in new services and compelling pricing strategy may hurt margins. Further, a high debt load also remains a concern. Management as a part of “Restock Kroger” plan is considering the sale of convenience store business and had also reiterated its fiscal 2017 earnings per share view.”

A number of other equities research analysts have also issued reports on the stock. UBS AG restated a “hold” rating and set a $24.00 price target on shares of Kroger Company (The) in a report on Thursday, October 12th. Stephens upgraded shares of Kroger Company (The) from an “underweight” rating to an “equal weight” rating and set a $36.44 price target on the stock in a report on Thursday, October 12th. Oppenheimer Holdings, Inc. reiterated a “hold” rating and issued a $22.00 price objective on shares of Kroger Company (The) in a research note on Wednesday, October 4th. Pivotal Research upgraded shares of Kroger Company (The) from a “hold” rating to a “buy” rating and upped their price objective for the company from $21.34 to $25.00 in a research note on Tuesday, September 12th. Finally, Hilliard Lyons reiterated a “buy” rating and issued a $30.00 price objective on shares of Kroger Company (The) in a research note on Tuesday, September 12th. One analyst has rated the stock with a sell rating, nineteen have given a hold rating, eight have given a buy rating and one has assigned a strong buy rating to the company’s stock. The stock presently has a consensus rating of “Hold” and an average price target of $29.23.

Kroger Company (NYSE:KR) traded down 1.20% on Monday, reaching $20.57. The company’s stock had a trading volume of 13,210,348 shares. Kroger Company has a 52 week low of $19.69 and a 52 week high of $36.44. The firm has a market capitalization of $18.30 billion, a price-to-earnings ratio of 12.44 and a beta of 0.76. The company has a 50 day moving average of $20.89 and a 200 day moving average of $24.70.

Kroger Company (The) (NYSE:KR) last released its quarterly earnings results on Friday, September 8th. The company reported $0.39 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.39. Kroger Company (The) had a net margin of 1.32% and a return on equity of 28.04%. The business had revenue of $27.60 billion for the quarter, compared to analyst estimates of $27.48 billion. During the same quarter in the previous year, the business earned $0.47 earnings per share. The firm’s revenue was up 3.9% compared to the same quarter last year. On average, analysts forecast that Kroger Company will post $1.97 earnings per share for the current year.

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Institutional investors have recently modified their holdings of the business. BlackRock Inc. raised its stake in shares of 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 in the last quarter. Vanguard Group Inc. raised its stake in shares of Kroger Company (The) by 1.2% in the 2nd quarter. Vanguard Group Inc. now owns 69,201,771 shares of the company’s stock valued at $1,613,786,000 after buying an additional 852,864 shares in the last quarter. FMR LLC raised its stake in shares of Kroger Company (The) by 17.7% in the 2nd quarter. FMR LLC now owns 49,409,616 shares of the company’s stock valued at $1,152,232,000 after buying an additional 7,446,349 shares in the last quarter. State Street Corp raised its stake in shares of Kroger Company (The) by 0.3% in the 2nd quarter. State Street Corp now owns 39,414,284 shares of the company’s stock valued at $919,140,000 after buying an additional 100,796 shares in the last quarter. Finally, Franklin Resources Inc. raised its stake in shares of Kroger Company (The) by 8.2% in the 2nd quarter. Franklin Resources Inc. now owns 12,045,681 shares of the company’s stock valued at $280,904,000 after buying an additional 908,078 shares in the last quarter. 75.72% of the stock is owned by hedge funds and other institutional investors.

About Kroger Company (The)

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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