On Jul 22, 2013, shares of
The Kroger Company
) recorded a new 52-week high of $39.05, up 49.5% year to
The current price is 10.8% above the Zacks Consensus average
price target of $35.25. Moreover, the stock is currently trading
at a forward P/E of 13.95x, an 8.9% discount to the peer group
average of 15.32x. The long-term EPS growth rate stands healthy
Kroger's leading position among the nation's largest grocery
retailers enables it to sustain growth in the top and bottom
lines, expand its store base and boost its market share. The
company is also well positioned to deliver higher earnings,
primarily through strong super market sales (sans fuel).
The company's Customer 1st strategy provides a strong value
proposition to consumers. The company's value offerings further
facilitate it to retain customers and in turn generate identical
supermarket sales growth.
Moreover, this Zacks Rank #2 (Buy) company announced its
decision to acquire all the shares of regional grocer,
Harris Teeter Supermarkets Inc.
). The deal is a strategic fit for Kroger as it facilitates the
company in expanding its footprint in several attractive and
high-growth markets including Delaware, Florida, Maryland and
Washington, DC, where Kroger currently does not have a presence.
Kroger will also get hold of Harris Teeter's distribution centers
for grocery, frozen and perishable food in Greensboro and Indian
Trail, N.C. and a dairy facility in High Point, N.C.
Other Stocks to Consider
Besides Kroger, another attractive stock in the retail
wholesale sector includes
Ingles Markets, Incorporated
), which carries a Zacks Rank #1 (Strong Buy).
The Fresh Market, Inc.
), carrying a Zacks Rank #2 (Buy) is also worth considering.
HARRIS TEETER (HTSI): Free Stock Analysis
INGLES MARKET A (IMKTA): Free Stock Analysis
KROGER CO (KR): Free Stock Analysis Report
FRESH MARKET (TFM): Free Stock Analysis
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