Kroger (KR) PT Raised to $65 at Telsey

Telsey analyst Joseph Feldman raised the price target on Kroger (NYSE: KR) to $65.00 (from $62.00) while maintaining a Outperform rating.

The analyst comments "TAG View: We expect continued profitable share gains in 3Q24, with ID sales, ex-fuel, of 2.0% vs. the FactSet consensus (FS) of 1.8% and adjusted EPS growth of ~5.0% to $1.00 vs. FS at $0.97. Our outlook reflects the ongoing recovery of units and gains from strategic initiatives focusing on freshness, digital, and loyalty, partly offset by the uneven consumer spending environment and the uptick in promotions. Across the industry, food sales have remained solid, as visible from US Census Bureau Food & Beverage Stores retail sales (not adjusted) of +2.9% in August, +0.6% in September, and +3.9% in October. In addition, Food-At-Home CPI came in at +0.9% in August, +1.3% in September, and +1.1% in October. Recent earnings reports from other retailers indicated stable demand for grocery—Albertsons' 2Q23 ID sales were +2.5%, Grocery Outlet's 3Q24 comp was +1.2%, Publix’s 3Q24 comp was +3.4%, Target's 3Q24 food & essentials comp was +LSD, and Walmart US' 3Q24 grocery comp was +MSD and health & wellness was +mid-teens."

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