Wall Street Zen has downgraded shares of Kroger (NYSE: KR) from a strong-buy rating to a buy rating, as outlined in a research report released on October 8, 2023. This adjustment reflects a shift in market sentiment regarding the grocery giant, which has attracted attention from several other analysts in recent weeks.
On September 11, Telsey Advisory Group reaffirmed an “outperform” rating, setting a price target of $82.00 for Kroger shares. Additionally, Barclays initiated coverage on July 21, issuing an “equal weight” rating with a target price of $75.00. Roth Capital upgraded Kroger from a “neutral” to a “buy” rating on September 17, establishing a target price of $75.00. Guggenheim also maintained a “buy” rating with a price target of $78.00.
Overall, ten investment analysts have assigned a Buy rating to Kroger, while nine have opted for a Hold rating. Data from MarketBeat.com indicates that Kroger currently holds a consensus rating of “Moderate Buy” with an average target price of $74.50.
Kroger recently reported its quarterly earnings, posting $1.04 earnings per share (EPS) for the period ending September 11. This figure exceeded the consensus estimate of $1.00 by $0.04. The company’s revenue reached $33.94 billion, slightly below the expected $34.08 billion. Despite these mixed results, Kroger achieved a return on equity of 32.62% and a net margin of 1.86%. Compared to the previous year, the revenue reflected a modest increase of 0.1%.
Kroger has set its fiscal year 2025 guidance between $4.70 and $4.80 EPS. Analysts are forecasting an EPS of $4.44 for the current fiscal year.
Dividend Announcement and Institutional Trading
In a separate announcement, Kroger declared a quarterly dividend of $0.35, which will be paid on December 1, 2023, to shareholders on record as of November 14. This dividend translates to an annualized payout of $1.40 and a yield of 2.1%. The company’s dividend payout ratio currently stands at 35.53%.
Recent movements among institutional investors further underscore the stock’s appeal. Brighton Jones LLC increased its stake in Kroger by 27.3% during the fourth quarter, now holding 15,733 shares valued at approximately $962,000. Similarly, GAMMA Investing LLC raised its holdings by 10.3%, resulting in ownership of 25,209 shares worth $1.706 million. Other notable increases came from Oppenheimer & Co. Inc., which grew its position by 11.7%, and Bessemer Group Inc., which increased its holdings by 1.7%.
Currently, approximately 80.93% of Kroger’s stock is held by institutional investors and hedge funds, indicating strong support from financial entities.
Kroger operates as a leading food and drug retailer in the United States, managing a variety of store formats, including combination food and drug stores, multi-department stores, and price impact warehouses. The company’s diverse offerings encompass natural and organic products, pharmacies, general merchandise, and more, catering to a broad customer base.
As the market continues to react to these recent developments, investors will be closely monitoring Kroger’s performance and strategic decisions in the coming months.
