Oppenheimer Thinks Kroger Company’s Stock is Going to Recover

By Carrie Williams

In a report released today, Rupesh Parikh from Oppenheimer reiterated a Buy rating on Kroger Company (NYSE: KR), with a price target of $38. The company’s shares closed yesterday at $29.12, close to its 52-week low of $28.29.

Parikh observed:

“Earlier this week, we spent time visiting KR stores in Atlanta. During our store checks, we found a large number of new price cuts primarily on Kroger branded private label products. In addition, the company supported these efforts with signage blanketing stores and highway billboards highlighting these pricing actions. We suspect these efforts are in response to Lidl’s pending entrance into the Southeast and/or to WMT. We continue to look favorably upon KR’s L-T prospects, but the near-term competitive and deflationary backdrop remains quite challenging as illustrated by our fieldwork.”

According to TipRanks.com, Parikh is a 5-star analyst with an average return of 16.2% and a 63.5% success rate. Parikh covers the Services sector, focusing on stocks such as United Natural Foods, Life Time Fitness, and Natural Grocers.

Currently, the analyst consensus on Kroger Company is Moderate Buy and the average price target is $33.22, representing a 14.1% upside.

In a report issued on May 12, RBC Capital also reiterated a Buy rating on the stock with a $37 price target.

Kroger Company’s market cap is currently $26.91B and has a P/E ratio of 14.27. The company has a book value ratio of 4.0172.

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The Kroger Co. engages in the operation of retail food and drug stores, multi-department stores, jewelry stores, and convenience stores. It also manufactures and processes some of the food for sale in its supermarkets. The Combination Food and Drug Stores are the primary food store format. The Multi Department stores are significantly larger in size than combo stores. In addition to the departments offered at a typical combo store, multi-department stores sell a wide selection of general merchandise items such as apparel, home fashion and furnishings, electronics, automotive products, toys and fine jewelry. The Marketplace Stores are smaller in size than multi-department stores. It offers full-service grocery and pharmacy departments as well as an expanded general merchandise area that includes outdoor living products, electronics, home goods and toys. The Price Impact Warehouse stores offer a ‘no-frills, low cost’ warehouse format and feature everyday low prices plus promotions for a wide selection of grocery and health and beauty care items. The company was founded by Barney Kroger in 1883 and is headquartered in Cincinnati, OH.