Kroger Shares Surge Amid Strong Market Performance and Outlook

Cincinnati, Ohio-based The Kroger Co. (KR) operates as a major food and drug retailer. The company offers a variety of store formats including combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. With a market capitalization of $48.2 billion, Kroger stands as one of the largest food retailers globally.

Stock Performance Exceeds Broader Market Trends

Kroger’s shares have significantly outperformed the broader market in the past 52 weeks. Over this period, KR has increased by 30.9%, whereas the S&P 500 Index ($SPX) saw a gain of just 8.6%. On a year-to-date basis, KR shares have risen 18.4%, contrasting with a 4.3% decline in the SPX during the same timeframe.

Comparison with Industry Peers

In addition, Kroger has exceeded the performance of the VanEck Retail ETF (RTH), which rose only 13.6% over the past year and 2.5% year-to-date.

Recent Financial Results and Future Projections

The recent increase in Kroger’s stock prices can be linked to a shift in investment from discretionary and cyclical stocks to consumer staples, driven by growing macroeconomic uncertainties. Following the release of its mixed Q4 results on March 6, Kroger’s stock gained 2%. The company reported adjusted sales of $34.3 billion for the quarter, marking a year-over-year increase of 2.6%, although this fell short of Wall Street’s expectations. Its adjusted EPS was flat at $1.14, surpassing consensus estimates by 1.8%.

More positively, Kroger anticipates a 2% to 3% increase in identical sales without fuel for fiscal 2025, with adjusted EPS projected between $4.60 and $4.80, representing a midpoint growth of 5.1% year-over-year.

For the current fiscal year, analysts predict an adjusted EPS increase of 6% year-over-year to $4.74. The company has demonstrated a solid history of earnings surprises, meeting or exceeding consensus estimates in each of the last four quarters.

Analyst Ratings and Future Price Targets

Among the 20 analysts covering Kroger’s stock, the consensus rating stands at “Moderate Buy.” This breaks down to 11 “Strong Buy” ratings, eight “Holds,” and one “Strong Sell.” This outlook is somewhat less optimistic than two months ago, when there were no “Strong Sell” recommendations.

On April 3, Guggenheim analyst John Heinbockel raised KR’s price target to $73 while maintaining a “Buy” rating.

Currently, Kroger trades above the mean price target of $68.45. The highest target in the market, set at $82, suggests an upside potential of 13.3%.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.