Kroger Co. (KR) Downgraded to Sell at Zacks Investment Research
According to Zacks, “Stiff competition, deflationary environment and cautious consumer spending are making things tough for Kroger. Despite registering an increase of 4% in the second quarter, total sales fell short of the estimate for the sixth straight quarter. All these compelled management to trim fiscal 2016 earnings projection. Higher debt-to-capitalization ratio also remains cause of concern. In spite of these headwinds, the company remains well positioned to deliver higher earnings, primarily through strong identical supermarket sales growth. We believe there remain enormous opportunities to augment identical supermarket sales, alleviate gross margin pressure and improve operating margin. In our view, Kroger’s long term earnings per share growth rate target of 8% to 11% seem achievable. We expect the company to sustain its earnings growth momentum buoyed by Customer 1st strategy, effective cost management and share repurchase activities.”
Several other equities research analysts have also recently weighed in on KR. Oppenheimer Holdings Inc. reiterated a buy rating and set a $42.00 price target on shares of Kroger in a research report on Monday, June 6th. Royal Bank Of Canada reiterated a sector perform rating and set a $39.00 price target on shares of Kroger in a research report on Monday, June 13th. Wolfe Research lowered Kroger from an outperform rating to a market perform rating in a report on Wednesday, June 15th. Piper Jaffray Cos. reissued an underweight rating and set a $29.00 price objective on shares of Kroger in a report on Friday, June 17th. Finally, Deutsche Bank AG cut their price objective on Kroger from $48.00 to $41.00 and set a buy rating for the company in a report on Friday, June 17th. Four investment analysts have rated the stock with a sell rating, nine have assigned a hold rating, fifteen have assigned a buy rating and two have given a strong buy rating to the company. Kroger presently has a consensus rating of Buy and a consensus target price of $38.92.
Kroger (NYSE:KR) opened at 29.255 on Monday. The company has a 50-day moving average of $31.43 and a 200-day moving average of $34.81. Kroger has a one year low of $29.21 and a one year high of $42.75. The company has a market cap of $27.62 billion, a price-to-earnings ratio of 13.872 and a beta of 0.70.
Kroger (NYSE:KR) last announced its quarterly earnings data on Friday, September 9th. The company reported $0.47 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $0.45 by $0.02. Kroger had a return on equity of 32.52% and a net margin of 1.82%. The business had revenue of $26.60 billion for the quarter. During the same quarter in the prior year, the firm posted $0.44 earnings per share. The company’s revenue was up 4.0% on a year-over-year basis. Equities research analysts expect that Kroger will post $2.14 EPS for the current fiscal year.
The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, December 1st. Investors of record on Tuesday, November 15th will be issued a dividend of $0.12 per share. This represents a $0.48 dividend on an annualized basis and a yield of 1.64%. The ex-dividend date is Thursday, November 10th. Kroger’s payout ratio is currently 22.86%.
In other Kroger news, insider Kevin M. Dougherty sold 31,000 shares of the company’s stock in a transaction on Thursday, September 15th. The stock was sold at an average price of $31.05, for a total value of $962,550.00. Following the completion of the sale, the insider now directly owns 130,857 shares in the company, valued at approximately $4,063,109.85. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, VP Oflen Mary Elizabeth Van sold 12,000 shares of the company’s stock in a transaction on Friday, July 8th. The stock was sold at an average price of $37.85, for a total value of $454,200.00. Following the completion of the sale, the vice president now owns 82,349 shares of the company’s stock, valued at $3,116,909.65. The disclosure for this sale can be found here. Corporate insiders own 0.85% of the company’s stock.
Several large investors have recently modified their holdings of KR. North Star Investment Management Corp. boosted its stake in shares of Kroger by 0.3% in the second quarter. North Star Investment Management Corp. now owns 10,988 shares of the company’s stock valued at $404,000 after buying an additional 29 shares in the last quarter. Silvercrest Asset Management Group LLC boosted its stake in shares of Kroger by 0.5% in the second quarter. Silvercrest Asset Management Group LLC now owns 13,369 shares of the company’s stock valued at $492,000 after buying an additional 66 shares in the last quarter. Integrated Investment Consultants LLC boosted its stake in shares of Kroger by 2.8% in the second quarter. Integrated Investment Consultants LLC now owns 3,722 shares of the company’s stock valued at $137,000 after buying an additional 100 shares in the last quarter. Capital Investment Advisors LLC boosted its stake in shares of Kroger by 1.2% in the second quarter. Capital Investment Advisors LLC now owns 8,305 shares of the company’s stock valued at $306,000 after buying an additional 100 shares in the last quarter. Finally, HGK Asset Management Inc. boosted its stake in shares of Kroger by 0.9% in the second quarter. HGK Asset Management Inc. now owns 11,540 shares of the company’s stock valued at $425,000 after buying an additional 100 shares in the last quarter. Institutional investors and hedge funds own 80.17% of the company’s stock.
Kroger Company Profile
The Kroger Co (Kroger) operates retail food and drug stores, multi-department stores, jewelry stores and convenience stores across the United States. The Company also manufactures and processes food for sale in its supermarkets. It operates through retail operations segment. The Company operates, either directly or through its subsidiaries, approximately 2,778 retail food stores under a range of local banner names, approximately 1,387 of which have fuel centers.
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