Cantor Fitzgerald Starts Kroger (KR) at Hold; Looks fairly Valued at This Time

Cantor Fitzgerald initiates coverage on Kroger (NYSE: KR) with a Hold. PT $24.00.

Cantor analyst said, "While we think the stock is fairly valued at this time, we expect the near-term earnings outlook to remain pressured based on higher input costs and continued weakness in volume trends. We are introducing below-consensus EPS estimates of $1.91 and $2.07, respectively, for FY:11 and FY:12 (compared to consensus estimates of $2.00 and $2.22 over the corresponding periods). Our estimates exclude approximately $0.05 per share tax benefit from 2Q:11 that Kroger elected to re-invest in price investments. For 4Q:11, our EPS estimate is $0.02 below the consensus figure of $0.49. Our FY:12 estimates also include an estimated $0.05 per share benefit from the recently announced plans to consolidate four under-funded multi-employer pension funds."

"While Wal-Mart's increased store development in Southern CA remains a concern, our channel checks confirm that Kroger is more than maintaining its share of industry growth across almost all of its major markets."

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 $23.55 yesterday.

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