Here's Why Kroger (KR) Fell More Than Broader Market

In the latest close session, Kroger (KR) was down 1.92% at $56.68. This change lagged the S&P 500's daily loss of 0.17%. On the other hand, the Dow registered a gain of 0.49%, and the technology-centric Nasdaq decreased by 0.83%.

Coming into today, shares of the supermarket chain had lost 1.28% in the past month. In that same time, the Retail-Wholesale sector gained 7.52%, while the S&P 500 gained 3.52%.

Investors will be eagerly watching for the performance of Kroger in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $1.05, marking a 0.96% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $34.78 billion, up 2.47% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $5.21 per share and a revenue of $151.36 billion, representing changes of +7.42% and +2.81%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Kroger. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.04% decrease. Kroger presently features a Zacks Rank of #3 (Hold).

In terms of valuation, Kroger is presently being traded at a Forward P/E ratio of 11.09. This denotes a discount relative to the industry average Forward P/E of 15.01.

Also, we should mention that KR has a PEG ratio of 1.55. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Retail - Supermarkets industry stood at 2.01 at the close of the market yesterday.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 226, which puts it in the bottom 9% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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