Wall Street’s views on Kroger
In this article, we’ll look at Wall Street analysts’ recommendations and current valuations for Kroger (KR). Kroger is covered by 25 analysts, who have jointly rated the stock as a 2.2 on a scale of 1 (strong buy) to 5 (sell).
Of the 25 analysts who have rated Kroger, 56% have recommended “buys,” 36% have recommended “holds,” and only 8% have recommended “sells” on the stock. In comparison, 57% of analysts recommend “buys,” and none recommend “sells” on Sprouts. SUPERVALU also has no “sell” ratings.
Comparing target prices and earnings potentials
Kroger is currently trading at $34.22, ~20% below its 52-week high. Analysts expect the company’s stock price to touch $36.09 over the next 12 months, indicating an upside potential of ~5%.
SUPERVALU and Sprouts, which have upsides of 20% and 24%, respectively, could be considered better picks.
Kroger is currently trading at a one-year forward price-to-earnings multiple (or PE) of 16.2x, operating in the middle of its 52-week PE range of 13.4x–18.6x.
The company continues to operate at a discount to natural and organic food competitors Whole Foods Market and Sprouts Farmers Market, which are trading at PEs of 23.4x and 22.1x, respectively. Its valuation is similar to Walmart’s (WMT) 16.5x, but it’s cheaper than Costco’s (COST) 29.3x.
Those looking to invest in Kroger through ETFs could choose to invest in the First Trust Consumer Staples AlphaDEX ETF (FXG). KR has a weight of ~2.4% in FXG.