Kroger (KR) Named Short-Term Catalyst Sell Idea at Deutsche Bank

March 18, 2021 7:00 AM EDT
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Price: $37.43 --0%

Rating Summary:
    8 Buy, 20 Hold, 7 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 5 | Down: 12 | New: 53
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Deutsche Bank named Kroger (NYSE: KR) a Short-Term Catalyst Sell Idea.

Analyst Paul Trussell commented, "We are adding KR to our short-term Sell catalyst list as we are cautious around the near-term set up for KR with very difficult top-line compares (particularly in 1H), GPM pressure from cycling lower shrink and a muted promotional environment, potential incremental COVID costs lasting longer than anticipated, and continued digital growth impacting profitability. The company has performed well during the pandemic and provided above Street estimates for 2021 with the onus now on KR to demonstrate relatively strong momentum as it laps shutdowns from last year. Further, we note that KR is trading at a 12.8x P/E multiple to 2021 EPS (3-year average at 11.9x) compared to ACI at 10.3x and at a 6.6x EV/EBITDA multiple vs. ACI at 5.0x. Finally, KR is up 11% YTD compared to peers (ACI, SFM, WMT, COST, and DG) down 1% (S&P 500 up 6%)."

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