Pivotal Research Remains a Buy on Kroger Company (KR)

By Jason Carr

In a report released today, Ajay Jain from Pivotal Research reiterated a Buy rating on Kroger Company (KRResearch Report), with a price target of $26. The company’s shares closed last Monday at $25.68.

Jain said:

“We’re in line with consensus for in EPS. Following a tentative deal to avoid a strike in Southern California, Kroger appears to have dodged a major bullet within the past few days. However, the resolution of that contract comes as Kroger is still dealing with ongoing labor issues and the threat of a strike at Southwest Washington. VALUATION – Our price target of $26 PT is unchanged reflects a forward PE multiple of 13x our FY19 EPS estimate which is line with Kroger’s historical average. A target EV/EBITDA level of 6.7x is also in line with historical levels and with Ahold/Delhaize. RISKS – If Kroger needs to respond to incremental competitive threats, industry-wide deflationary (or inflationary) pressures, or if there is a significant contraction in the employment cycle, Kroger’s valuation metrics could be at risk.”

According to TipRanks.com, Jain is a 4-star analyst with an average return of 12.7% and a 57.0% success rate. Jain covers the Services sector, focusing on stocks such as Walgreens Boots Alliance, US Food Holdings Corp, and SpartanNash Co.

Currently, the analyst consensus on Kroger Company is a Moderate Buy with an average price target of $25.80, a 0.2% upside from current levels. In a report issued on September 3, Guggenheim also reiterated a Buy rating on the stock with a $26 price target.

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The company has a one-year high of $31.98 and a one-year low of $20.70. Currently, Kroger Company has an average volume of 9.97M.

Based on the recent corporate insider activity of 131 insiders, corporate insider sentiment is neutral on the stock. Most recently, in July 2019, Susan Kropf, a Director at KR sold 13,000 shares for a total of $281,320.

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The Kroger Co. engages in the operation of retail food and drug stores, multi-department stores, jewellery 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.