Zacks Investment Research Lowers Kroger (NYSE:KR) to Hold

Zacks Investment Research lowered shares of Kroger (NYSE:KR) from a buy rating to a hold rating in a report issued on Tuesday, Zacks.com reports. They currently have $37.00 target price on the stock.

According to Zacks, “Shares of Kroger have risen and outperformed the industry in the past six months. The company has been benefiting from coronavirus-induced demand as evident from better-than-expected first-quarter fiscal 2020 results, wherein both top and bottom lines grew year over year. Kroger, which operates in the thin-margin grocery industry, has been making every effort to strengthen position not only with respect to products but also in terms of the way consumers prefer shopping grocery. Notably, the company’s “Restock Kroger” program involving investments in omni-channel platform, identifying margin-rich alternative profit streams, merchandise optimization, and lowering of expenses has been gaining traction. However, management expects that incremental investments and pressure on fuel business may weigh on second-quarter profitability.”

Several other analysts have also recently issued reports on the company. Goldman Sachs Group started coverage on Kroger in a research note on Tuesday, July 21st. They set a neutral rating and a $36.00 price objective on the stock. Deutsche Bank upped their price target on Kroger from $33.00 to $35.00 in a research report on Friday, June 19th. BMO Capital Markets restated a hold rating and set a $34.00 price objective on shares of Kroger in a research note on Friday, July 24th. Bank of America increased their target price on shares of Kroger from $37.00 to $42.00 and gave the stock a buy rating in a report on Wednesday, May 13th. Finally, UBS Group raised their price target on shares of Kroger from $33.00 to $35.00 and gave the stock a neutral rating in a research report on Monday, June 15th. Three equities research analysts have rated the stock with a sell rating, fourteen have issued a hold rating and ten have issued a buy rating to the company’s stock. Kroger has an average rating of Hold and an average target price of $34.21.

Shares of KR traded up $0.72 during mid-day trading on Tuesday, reaching $35.31. 365,636 shares of the stock traded hands, compared to its average volume of 10,410,621. The stock has a fifty day simple moving average of $34.12 and a 200 day simple moving average of $31.85. Kroger has a 12-month low of $21.82 and a 12-month high of $36.84. The company has a quick ratio of 0.40, a current ratio of 0.83 and a debt-to-equity ratio of 2.02. The firm has a market cap of $26.65 billion, a price-to-earnings ratio of 13.53, a P/E/G ratio of 2.26 and a beta of 0.37.

Kroger (NYSE:KR) last released its quarterly earnings results on Thursday, June 18th. The company reported $1.22 earnings per share for the quarter, beating the Zacks’ consensus estimate of $1.12 by $0.10. The business had revenue of $41.55 billion during the quarter, compared to analyst estimates of $40.92 billion. Kroger had a net margin of 1.66% and a return on equity of 24.62%. The business’s revenue was up 11.5% on a year-over-year basis. During the same period last year, the business earned $0.72 EPS. On average, equities research analysts expect that Kroger will post 2.84 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 1st. Shareholders of record on Friday, August 14th will be issued a $0.72 dividend. The ex-dividend date is Thursday, August 13th. This represents a $2.88 annualized dividend and a dividend yield of 8.16%. This is a boost from Kroger’s previous quarterly dividend of $0.16. Kroger’s dividend payout ratio is currently 29.09%.

In related news, VP Carin L. Fike sold 968 shares of Kroger stock in a transaction dated Thursday, July 16th. The stock was sold at an average price of $33.97, for a total value of $32,882.96. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, Director Clyde R. Moore sold 13,000 shares of the business’s stock in a transaction dated Thursday, July 23rd. The stock was sold at an average price of $35.24, for a total value of $458,120.00. Following the sale, the director now owns 132,677 shares in the company, valued at approximately $4,675,537.48. The disclosure for this sale can be found here. Insiders have sold a total of 224,059 shares of company stock valued at $7,485,124 in the last quarter. Insiders own 1.36% of the company’s stock.

Hedge funds have recently added to or reduced their stakes in the company. The Manufacturers Life Insurance Company lifted its holdings in shares of Kroger by 12.0% in the first quarter. The Manufacturers Life Insurance Company now owns 862,842 shares of the company’s stock valued at $25,989,000 after purchasing an additional 92,774 shares in the last quarter. Advisor Group Holdings Inc. purchased a new stake in Kroger in the 1st quarter worth about $11,267,000. State Street Corp boosted its position in Kroger by 2.9% during the 1st quarter. State Street Corp now owns 41,592,136 shares of the company’s stock worth $1,252,755,000 after acquiring an additional 1,154,794 shares during the period. Tower Research Capital LLC TRC boosted its position in Kroger by 2,270.4% during the 1st quarter. Tower Research Capital LLC TRC now owns 11,994 shares of the company’s stock worth $361,000 after acquiring an additional 11,488 shares during the period. Finally, Voloridge Investment Management LLC purchased a new position in Kroger during the 1st quarter valued at about $13,534,000. Institutional investors and hedge funds own 77.77% of the company’s stock.

About Kroger

The Kroger Co operates as a retailer in the United States. The company operates supermarkets, multi-department stores, marketplace stores, and price impact warehouse stores. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys.

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