Kroger (KR) Dips More Than Broader Markets: What You Should Know

In the latest trading session, Kroger (KR) closed at $45.26, marking a -1.99% move from the previous day. This move lagged the S&P 500’s daily loss of 1.56%. At the same time, the Dow lost 1.81%, and the tech-heavy Nasdaq lost 4.66%.

Prior to today’s trading, shares of the supermarket chain had gained 3.59% over the past month. This has lagged the Retail-Wholesale sector’s gain of 7.14% and the S&P 500’s gain of 3.82% in that time.

Wall Street will be looking for positivity from Kroger as it approaches its next earnings report date. In that report, analysts expect Kroger to post earnings of $0.93 per share. This would mark year-over-year growth of 2.2%. Our most recent consensus estimate is calling for quarterly revenue of $34.81 billion, up 5.32% from the year-ago period.

KR’s full-year Zacks Consensus Estimates are calling for earnings of $4.13 per share and revenue of $148.24 billion. These results would represent year-over-year changes of +12.23% and +7.51%, respectively.

It is also important to note the recent changes to analyst estimates for Kroger. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. Kroger currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Kroger is currently trading at a Forward P/E ratio of 11.17. This represents a discount compared to its industry’s average Forward P/E of 11.98.

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We can also see that KR currently has a PEG ratio of 1.83. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Retail – Supermarkets industry currently had an average PEG ratio of 2.28 as of yesterday’s close.

The Retail – Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 11, which puts it in the top 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KR in the coming trading sessions, be sure to utilize Zacks.com.

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