Markets

Kroger (KR) Gains But Lags Market: What You Should Know

In the latest trading session, Kroger (KR) closed at $36.06, marking a +0.42% move from the previous day. The stock lagged the S&P 500's daily gain of 1%. At the same time, the Dow added 1.35%, and the tech-heavy Nasdaq gained 0.6%.

Prior to today's trading, shares of the supermarket chain had gained 2.22% over the past month. This has lagged the Retail-Wholesale sector's gain of 5.92% and the S&P 500's gain of 4.48% in that time.

Wall Street will be looking for positivity from KR as it approaches its next earnings report date. On that day, KR is projected to report earnings of $0.50 per share, which would represent year-over-year growth of 13.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $29.66 billion, up 5.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.84 per share and revenue of $129.22 billion, which would represent changes of +29.09% and +5.67%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KR. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. KR is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that KR has a Forward P/E ratio of 12.64 right now. Its industry sports an average Forward P/E of 17.14, so we one might conclude that KR is trading at a discount comparatively.

Meanwhile, KR's PEG ratio is currently 2.3. 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 2.43 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 102, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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