Kroger's Upcoming Earnings: A Mixed Outlook for Investors

Kroger's stock performance shows mixed results as it prepares for an earnings announcement. The predicted EPS growth is tepid amid slight revenue increases, while the stock's recent downtrend contrasts with sector gains.

Date: 21-05-2025

AI Rating: 6

Stock Performance Overview
Kroger (KR) recently closed at $69.50, showing a +0.78% movement compared to the previous day, outperforming the S&P 500's loss of 0.39%. Despite this, Kroger's stock has dropped by 4.63% over the past month, significantly underperforming the Retail-Wholesale sector's gain of 12.4% and the S&P 500's gain of 13.07%. This divergence raises concerns for investors regarding Kroger's competitive positioning and market perception.

Earnings Per Share (EPS) Insights
The upcoming earnings report is critical, with a forecasted EPS of $1.44, indicating a modest growth of 0.7% compared to the prior year's quarter. For the entire year, Zacks Consensus Estimates predict an EPS of $4.74, reflecting an increase of 6.04%, which is moderately positive but may not excite investors looking for robust growth.

Expected Revenue Growth
Kroger's anticipated revenue of $45.38 billion suggests a slight growth of 0.25% compared to the prior-year quarter. While revenue growth is generally a good sign, the minimal increase may not satisfy aggressive investors. The yearly revenue estimation of $149.08 billion indicates a growth of 1.33%, which is also deemed lackluster compared to higher expectations in a thriving retail environment.

Analyst Sentiment and Valuation Metrics
Analyst revisions for Kroger have remained stable, suggesting a cautious optimism. The Zacks Rank currently stands at #3 (Hold), indicating a neutral stance among analysts. Moreover, Kroger's Forward P/E ratio at 14.54 is below the industry average of 14.73, suggesting that the stock is undervalued, yet the PEG ratio of 2.06 indicates concerns about earnings growth compared to the industry average of 1.81.

Given the overall market conditions and Kroger's current standing within the sector, investors may need to exercise caution. The earnings report and subsequent analyst reactions could lead to fluctuations in stock performance in the short term.

Stocks: KR