Guggenheim Reiterates Buy Rating on Kroger (KR)

Guggenheim analyst John Heinbockel reiterated a Buy rating and $71.00 price target on Kroger (NYSE: KR).

The analyst commented: "Today’s incremental share price weakness is a function of both the unexpected, though accretive, Giant Eagle acquisition and ongoing concerns about stepped-up pricing intensity in a potentially re-inflationary operating backdrop. We understand the latter, although price wars have been avoided during the past decade, driven by improved data analytics around demand elasticity and the resulting sizable costs of truly altering volume trajectories. As to the former, we believe Giant Eagle is a solid asset, in compelling, adjacent Midwest markets, poised to benefit from significant potential synergies. Moreover, the transaction is surprisingly inexpensive and thus likely to produce healthy EPS accretion by 2028. Because we regard the twin goals of volume improvement and EBIT margin expansion as achievable, we remain BUY-rated at 5.8x 2026E EBITDA with a $71 Price Target."

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 $56.24 yesterday.

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