Why Kroger (KR) Outpaced the Stock Market Today

Kroger (KR) ended the recent trading session at $64.91, demonstrating a +2.33% change from the preceding day's closing price. The stock outpaced the S&P 500's daily gain of 0.13%. Meanwhile, the Dow experienced a rise of 0.16%, and the technology-dominated Nasdaq saw a decrease of 0.22%.

The stock of supermarket chain has fallen by 6.11% in the past month, lagging the Retail-Wholesale sector's gain of 0.5% and the S&P 500's loss of 0.2%.

The investment community will be paying close attention to the earnings performance of Kroger in its upcoming release. In that report, analysts expect Kroger to post earnings of $1.04 per share. This would mark year-over-year growth of 6.12%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.31 billion, up 2.02% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $4.79 per share and revenue of $148.79 billion, indicating changes of +7.16% and -0.73%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Kroger. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% lower within the past month. As of now, Kroger holds a Zacks Rank of #3 (Hold).

From a valuation perspective, Kroger is currently exchanging hands at a Forward P/E ratio of 13.26. This denotes a discount relative to the industry average Forward P/E of 16.72.

We can also see that KR currently has a PEG ratio of 1.84. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Supermarkets industry currently had an average PEG ratio of 2.39 as of yesterday's close.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 23, putting it in the top 10% of all 250+ industries.

Story Continues

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

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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

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