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Kroger Touches New High - Analyst Blog

By: Zacks.com
Posted: 3/14/2013 10:10:00 AM
Referenced Stocks: HLF;KR;SVU;SWY

Shares of The Kroger Company ( KR ) attained a new 52-week high of $31.41 on Wednesday, Mar 13, gaining momentum from the company's better-than-expected fourth-quarter fiscal 2012 results. The shares of this Zacks Rank #2 (Buy) grocery retailer eventually closed at $31.31, recording a healthy year-to-date return of approximately 19.4%. Kroger currently trades at a forward P/E of 11.41x in line with the peer group average.

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. The company's strong corporate and national brands helped gain customers loyalty. Its long-term earnings per share growth rate target equates to 8% to 11%.

Kroger's customer-centric business model provides a strong value proposition to consumers. It is well positioned to continue its growth momentum primarily through identical supermarket sales growth.

The company posted stronger-than-anticipated fourth-quarter fiscal 2012 results, on the back of Customer 1st strategy and cost effective management. Kroger declared impressive results on Mar 7, 2013, wherein earnings of 88 cents a share beat the Zacks Consensus Estimate of 70 cents, and surged from 50 cents earned in the prior-year quarter. The company in the last 4 quarters has outpaced the Zacks Consensus Estimates by an average of 11.3%.

Total sales (including fuel center sales) climbed 12.8% to $24,153.1 million from the prior-year quarter, and came ahead of the Zacks Consensus Estimate of $24,053 million.

Buoyed by healthy results, management now projects fiscal 2013 earnings between $2.71 and $2.79.

The Zacks Consensus Estimate for fiscal 2013 rose 4.6% to $2.74 per share over the last 7 days. For fiscal 2014, the Zacks Consensus Estimate advanced 3.5% over the same timeframe to $2.97 per share.     

Other Stocks to Consider

The stock worth considering in the food, drug retail, wholesale sector includes Safeway Inc. ( SWY ), which holds a Zacks Rank #1 (Strong Buy) and SUPERVALU Inc. ( SVU ) and Herbalife Ltd. ( HLF ), both of which carry a Zacks Rank #2 (Buy).



HERBALIFE LTD (HLF): Free Stock Analysis Report

KROGER CO (KR): Free Stock Analysis Report

SUPERVALU INC (SVU): Free Stock Analysis Report

SAFEWAY INC (SWY): Free Stock Analysis Report

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