Guggenheim Reiterates Buy Rating on Kroger (KR)

Guggenheim analyst John Heinbockel reiterated a Buy rating and $57.00 price target on Kroger (NYSE: KR) following earnings.

The analyst commented, "The significant YTD gains reflect the business’ relative top and bottom-line strength in an increasingly challenging economic climate. Although “consumables” comps trail a number of competitors, total growth is superior due to limited exposure to more discretionary categories while the 16% increase in 1Q FIFO EBIT was far superior to most large-cap retail peers. Updated full-year guidance implies 6% EBIT declines in 2Q-4Q, a reasonable expectation given multiple moving parts, most notably food inflation. We raise our estimates, modestly, to the midpoint of guidance. The current 6.7x 2022E EBITDA multiple—see Exhibit 1—is reasonable for a defensive retailer in the early stages of an economic downturn, in our view. We remain Buy-rated with a $57 PT, 15% upside from current levels."

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 $49.82 yesterday.

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