Jefferies Lowers Price Target on Kroger (KR), Continues to Outperform in Slowing Market

Jefferies is reaffirming its Buy rating on shares of Kroger (NYSE: KR), but is lowering its price target slightly by $1 to $27 following recent Nielsen data.

The Nielsen data showed a slow down in volumes and signs that consumers are not purchasing at the levels in which they use to before the inflation changes.

The firm reports that Kroger continues to outperform the industry as a whole, but the overall slowdown in the food-at-home is weighing on the company. As a result, Jefferies tweaked its estimates for the third and fourth quarter, and cut its 2012 and 2013 EPS estimates from $2.00 and $2.30 to $1.93 and $2.21.

The company is scheduled to release its second quarter results next week and Jefferies believes that they will be strong. Currently the firm is estimating EPS of $0.44 for the second quarter.

An analyst at Jefferies comments, "Our research shows that Kroger continues to gain share at a similar pace relative to the industry, but that the overall slowdown impacting the food-at-home channel is being felt almost by everyone in the channel; even the best operators."

For more ratings news on Kroger click here and for the rating history of Kroger click here.

Shares of Kroger closed at $23.06 yesterday.

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