Oppenheimer maintained an Outperform rating on Kroger (NYSE: KR), and cut the price target to $40.00 (from $42.00), ahead of the company's 2Q earnings report. Sentiment remains negative toward KR shares as Oppenheimer expects management will likely cut both Comp and EPS guidance.

Analyst Rupesh Parikh commented, "In recent months, we have been hard-pressed to find really anything positive on the grocery front. As we spent time reviewing KR’s prospects into the print, we focused our efforts on assessing where the shares could bottom with our now more realistic earnings forecasts. Yes, the top line likely remains very challenging, and we expect another comp shortfall as we are still in the middle of a difficult deflationary and an increasingly promotional environment. As a result, shorter-term investors still need to proceed with caution, especially with accelerating deflationary headwinds lately. However, for longer-term investors, the business's underlying cash generation remains very strong, which suggests KR shares could be approaching a near-term bottom. We would take advantage of any weakness on the print."

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 $32.25 yesterday.