The Kroger Company
) surged to attain a new 52-week high of $40.74 on Sep 17, 2013,
before closing at $40.55. Shares of this Zacks Rank #3 (Hold)
stock gained momentum from the company's impressive
second-quarter fiscal 2013 results and have amassed a
year-to-date return of roughly 55.8%.
Based on the current price, this grocery retailer is 8.4%
above the Zacks Consensus average analyst price target of $37.40.
The company currently trades at a forward P/E of 14.54x, a
discount of 6.9% to the peer group average of 15.61x.
Additionally, the company's long-term estimated EPS growth rate
A dominant position among the nation's largest grocery
retailers enables Kroger to sustain growth in top and bottom
lines, expand its store base, and boost its market share by
introducing new items. The company posted quarterly earnings of
60 cents a share that surged 17.6% year over year buoyed by the
Customer 1st strategy. Total sales climbed 4.6% during the
The company's strong corporate and national brands helped gain
customer loyalty. We believe that given the company's strong
identical store sales growth for about 39 successive quarters and
strong bottom-line performance, Kroger is poised to achieve its
long-term earnings per share growth rate target of 8% to 11%.
Management reiterated fiscal 2013 earnings between $2.73 and
Management continues to deploy capital to concentrate more on
remodels, merchandising, and other viable projects. These include
nearly 45 to 50 major capital projects comprising new store
openings, expansions and relocations, and 130 to 160
Kroger also remains optimistic about its acquisition of
regional grocer, Harris Teeter Supermarkets for $2.44 billion in
cash. It will provide Kroger an opportunity to expand its
footprint in high-growth markets including Delaware, Florida,
Maryland and Washington.
In our view, Kroger's customer-centric business model provides
a strong value proposition to consumers, and is well positioned
to deliver higher earnings, primarily through strong identical
supermarket sales growth (excluding fuel).
Alongside, shares of
Best Buy Co., Inc.
) reached a new 52-week high of $56.64, $39.14 and $144.00,
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