UBS Raises Price Target and Estimates on Kroger (KR); Top Shop

June 15, 2012 11:13 AM EDT Send to a Friend
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Price: $51.65 +0.84%

Rating Summary:
    10 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 39 | Down: 10 | New: 33
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UBS maintains a 'Neutral' on Kroger (NYSE: KR) price target of $24.00 (from $23.00).

Analyst, Jason DeRise, said, "We believe Kroger continues to execute the correct strategy by going for market share, funded by lower mark ups. KR’s identical sales growth (ex fuel) of 4.2% was the best of the traditional food retailers, (on average traditional food retailers reported 1% comp sales growth). But to achieve this, Kroger’s clean gross margin fell ~50bps vs the traditional food retail average of flat gross margins. Combining this gross margin performance with its comparable sales growth, we estimate KR’s comparable gross profit growth in Q1 was 2%, which doubled the sector average."

UBS slightly raises FY13 EPS estimate from $2.34 to $2.37 and FY14 from $2.47 to $2.48.

For an analyst ratings summary and ratings history on Kroger click here. For more ratings news on Kroger click here.

Shares of Kroger closed at $22.58 yesterday.


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