Kroger (KR) Outperforms Broader Market: What You Need to Know

Kroger (KR) closed the most recent trading day at $57.23, moving +2.09% from the previous trading session. This change outpaced the S&P 500's 0.65% gain on the day. At the same time, the Dow added 0.13%, and the tech-heavy Nasdaq gained 0.81%.

The supermarket chain's shares have seen a decrease of 0.88% over the last month, not keeping up with the Retail-Wholesale sector's gain of 4.78% and the S&P 500's gain of 2.38%.

Investors will be eagerly watching for the performance of Kroger in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.05, showcasing a 0.96% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.78 billion, up 2.47% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.21 per share and revenue of $151.36 billion, indicating changes of +7.42% and +2.52%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Kroger should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. At present, Kroger boasts a Zacks Rank of #3 (Hold).

With respect to valuation, Kroger is currently being traded at a Forward P/E ratio of 10.76. Its industry sports an average Forward P/E of 14.76, so one might conclude that Kroger is trading at a discount comparatively.

One should further note that KR currently holds a PEG ratio of 1.5. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. KR's industry had an average PEG ratio of 2.04 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 205, finds itself in the bottom 17% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KR in the coming trading sessions, be sure to utilize Zacks.com.

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

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