Kroger (KR) Dips More Than Broader Markets: What You Should Know
In the latest trading session, Kroger (KR) closed at $44.21, marking a -1.86% move from the previous day. This change lagged the S&P 500's daily loss of 1.3%. Elsewhere, the Dow lost 0.77%, while the tech-heavy Nasdaq lost 5.51%.
Prior to today's trading, shares of the supermarket chain had gained 1.05% over the past month. This has lagged the Retail-Wholesale sector's gain of 11.37% and the S&P 500's gain of 6.41% in that time.
Wall Street will be looking for positivity from Kroger as it approaches its next earnings report date. The company is expected to report EPS of $0.93, up 2.2% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.81 billion, up 5.32% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.13 per share and revenue of $148.24 billion, which would represent changes of +12.23% and +7.51%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Kroger. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% higher. Kroger currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Kroger is currently trading at a Forward P/E ratio of 10.9. Its industry sports an average Forward P/E of 12.1, so we one might conclude that Kroger is trading at a discount comparatively.
It is also worth noting that KR currently has a PEG ratio of 1.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Supermarkets stocks are, on average, holding a PEG ratio of 2.25 based on yesterday's closing prices.
The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 2, putting it in the top 1% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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