Barclays Maintains an 'Equalweight' on Kroger (KR); 1Q11 Earnings Preview
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Price: $56.32 +0.09%
Rating Summary:
16 Buy, 19 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
16 Buy, 19 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Barclays maintains an 'Equalweight' on Kroger (NYSE: KR), PT $21.
Barclays analyst says, "We remain negative on the group based on our view that inflation is only a positive if the environment allows higher costs to be passed along to consumers. Early commentary from the supermarkets was that inflation of 1-2% was being passed through, but we are doubtful that bigger increases that seem likely to come in 2H11 will be passed through fully. One small-box discounter that competes with KR recently indicated its willingness to give up margin to gain market share, and this could create a tougher competitive environment, especially if consumers pull back spending markedly because of high gas prices and the weak economy. We believe KR is well positioned given its strong price and value image and its broad private-label assortment, but with a valuation of 11.0x our 2012 EPS, we believe it is premature to buy the stock."
"We are raising our 1Q11 EPS by $0.01, to $0.63, putting us $0.01 below consensus, to reflect the benefit from higher gasoline prices on sales of owned fuel centers. We are also raising each of our 2Q, 3Q and 4Q estimates by $0.01 for the same reason. Our 1Q11 estimate assumes that id's ex-fuel rise by 3.5%."
For more ratings news on Kroger click here and for the rating history of Kroger click here.
Shares of Kroger closed at $23.62 yesterday.
Barclays analyst says, "We remain negative on the group based on our view that inflation is only a positive if the environment allows higher costs to be passed along to consumers. Early commentary from the supermarkets was that inflation of 1-2% was being passed through, but we are doubtful that bigger increases that seem likely to come in 2H11 will be passed through fully. One small-box discounter that competes with KR recently indicated its willingness to give up margin to gain market share, and this could create a tougher competitive environment, especially if consumers pull back spending markedly because of high gas prices and the weak economy. We believe KR is well positioned given its strong price and value image and its broad private-label assortment, but with a valuation of 11.0x our 2012 EPS, we believe it is premature to buy the stock."
"We are raising our 1Q11 EPS by $0.01, to $0.63, putting us $0.01 below consensus, to reflect the benefit from higher gasoline prices on sales of owned fuel centers. We are also raising each of our 2Q, 3Q and 4Q estimates by $0.01 for the same reason. Our 1Q11 estimate assumes that id's ex-fuel rise by 3.5%."
For more ratings news on Kroger click here and for the rating history of Kroger click here.
Shares of Kroger closed at $23.62 yesterday.
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