Kroger Rating Lowered to Sell at Goldman Sachs Group Inc. (KR)
Kroger (NYSE: KR) was downgraded by equities researchers at Goldman Sachs Group Inc. from a “neutral” rating to a “sell” rating in a research report issued on Friday, TheFlyOnTheWall.com reports. They currently have a $35.00 target price on the stock, up from their previous target price of $32.00. Goldman Sachs Group Inc.’s target price points to a potential downside of 7.38% from the stock’s previous close.
The analysts wrote, “We are downgrading The Kroger Co. (KR) to Sell from Neutral with 7% downside to our new $35, 12-month price target vs. 1% average upside for our coverage. We see unfavorable risk/reward as the shares now trade at a premium valuation relative to their history (13X NTM P/E vs. 5-yr average of 11.4X), industry tailwinds are fading, and our analysis suggests the market may already be pricing in upside to management’s HTSI accretion guidance. We believe core EBITDA growth (excluding any acquisitions or synergies) will moderate amidst a soft industry backdrop, making the elevated valuation tough to sustain.”
Shares of Kroger (NYSE: KR) traded down 0.64% during mid-day trading on Friday, hitting $37.55. Kroger has a one year low of $20.98 and a one year high of $38.20. The stock’s 50-day moving average is currently $34.79. The company has a market cap of $19.460 billion and a P/E ratio of 13.02.
Kroger (NYSE: KR) last posted its quarterly earnings results on Thursday, June 20th. The company reported $0.92 EPS for the quarter, beating the Thomson Reuters consensus estimate of $0.88 by $0.04. The company had revenue of $30.04 billion for the quarter, compared to the consensus estimate of $30.17 billion. During the same quarter in the previous year, the company posted $0.78 earnings per share. The company’s revenue for the quarter was up 3.4% on a year-over-year basis. Kroger has set its FY14 guidance at $2.73-2.80 EPS. On average, analysts predict that Kroger will post $2.80 earnings per share for the current fiscal year.
A number of other analysts have also recently weighed in on KR. Analysts at Scotiabank raised their price target on shares of Kroger from $38.00 to $41.00 in a research note to investors on Thursday. Separately, analysts at Guggenheim raised their price target on shares of Kroger from $35.00 to $42.00 in a research note to investors on Wednesday. They now have a “buy” rating on the stock. Finally, analysts at Cantor Fitzgerald reiterated a “hold” rating on shares of Kroger in a research note to investors on Wednesday. They now have a $37.00 price target on the stock, up previously from $33.00.
Three research analysts have rated the stock with a sell rating, eight have issued a hold rating and twelve have given a buy rating to the company. Kroger has a consensus rating of “Hold” and an average price target of $35.33.
The company also recently announced a quarterly dividend, which is scheduled for Sunday, September 1st. Stockholders of record on Thursday, August 15th will be paid a dividend of $0.15 per share. This represents a $0.60 annualized dividend and a dividend yield of 1.59%. The ex-dividend date is Tuesday, August 13th.
The Kroger Co is a retailer in the United States. The Company also manufactures and processes some of the food for sale in its supermarkets.
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