Kroger (KR): Good Risk Reward Into Analyst Day - Guggenheim
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Guggenheim analyst, John Heinbockel, reiterated his Buy rating on shares of Kroger (NYSE: KR) ahead of the company's annual analyst meeting.
KR's analyst meeting is being hosted in Cincinnati this week and is likely to be focused on how an increasingly rapid pace of strategic change should enable the 8-11% secular EPS growth target to be sustained in a modest inflationary climate. That said, the analyst is not expecting guidance for 2017 given ongoing deflationary uncertainties.
The analyst likes the shares' risk/reward and this remains his Best Idea but he acknowledges that patience will be required. He stated that "The bottom line is that with EPS unlikely to fall below $2, downside appears to be $30ish while upside, assuming a clear improvement in deflation, could be at least $36-37 by this time next year, in our view".
price target of $40.00
Shares of Kroger closed at $31.26 yesterday.
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