RBC Capital Remains Sidelined as Kroger (KR) Lowered Full Year Guidance
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RBC Capital reiterated a Sector Perform rating and $37.00 price target on Kroger (NYSE: KR) after the company adjusts guidance in face of headwinds. KR is now expecting ID sales (ex. fuel) of 1.4%-1.8% (from 2.5%-3.5%), adjusted EPS of $2.10-$2.20 (from $2.19-$2.28), and Capex of $3.6bn-$3.9bn (from $4.1bn-$4.4.bn).
Analyst William Kirk commented, "Kroger lowered its full year guidance on the face of intensified deflationary headwind and diminishing benefits from fuel margin and beef deflation, which is expected. However, Kroger is scaling back Capex spending for FY16 and FY17, which we think will become a disadvantage when other strong competitors are doing the opposite. Reiterate Sector Perform rating and $37 price target."
Shares of Kroger closed at $31.51 yesterday.
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