Goldman Comments on Kroger (KR) Ahead of Second Quarter Earnings, Maintains Sell Rating

Goldman Sachs is reaffirming its Sell rating and $22.50 price target on shares of Kroger (NYSE: KR) ahead of its second quarter results.

The company is expected to report its second quarter earnings on September 9. The firm is forecasting EPS of $0.41, $0.02 below consensus. They are also anticipating that top-line trends will remain robust due to sequential acceleration in non-fuel ID sales.

The increasing inflation on food prices and a high mix of fuel should weigh on margins in the quarter. Goldman notes that while many food retailers have topped expectations, but "stock responses have been mixed as investors have focused on commentary regarding recent trends and the ability to pass on inflation."

Goldman believes investors will focus on if consumers have backed off due to rising prices, if people have moved to Kroger as they trade down, and if management will reiterate its 2011 earnings guidance of $1.85-$1.95.

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

Shares of Kroger closed at $22.76 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Cisco rating cut at HSBC as analyst sees a lack of catalysts
• SVB & T Corporation (SVBT) Tops Q2 EPS by 275c