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On Wednesday, Guggenheim reaffirmed its positive stance on Kroger stock (NYSE:KR), maintaining a Buy rating and a price target of $71.00. The retail giant, currently valued at $47.14 billion, is trading near its 52-week high of $65.75, reflecting strong market confidence. The endorsement comes as Kroger finalizes its executive team with the addition of a former Pepsico (NASDAQ:PEP) executive as the new permanent Chief Financial Officer (CFO). This move nearly concludes a series of executive changes that included the departures of CFO Gary Millerchip, now with Costco (NASDAQ:COST), and Chief Merchandising Officer Stuart Aitken, currently CEO of Circana.
The new CFO, whose extensive experience in the food industry is expected to bolster Kroger’s financial planning and analysis, steps into a role that is crucial for the company’s future growth. According to InvestingPro data, Kroger maintains a strong financial health score of GOOD, with liquid assets exceeding short-term obligations. Kroger is also on the verge of announcing a new Senior Vice President of Store Operations, following Mary Ellen Adcock (JO:AIPJ)’s transition to Chief Marketing Officer (CMO).
Guggenheim’s analysis suggests that Kroger is positioned for an uptick in comparable sales and earnings before interest and taxes (EBIT) growth. With trailing twelve-month revenue of $149.88 billion and a P/E ratio of 17.02, InvestingPro analysis indicates the stock is currently trading near its Fair Value. This anticipated growth is attributed to the resumption of the ESI contract, significant growth in media revenue, and a reduction in digital losses. Moreover, the company is expected to strategically deploy an $8 billion cash reserve.
The research firm’s $71 price target for Kroger is described as conservative, implying there is room for an increase in the stock’s multiple. Supporting this outlook, InvestingPro reveals that Kroger has maintained dividend payments for 20 consecutive years with a 10.34% dividend growth in the last twelve months. For deeper insights into Kroger’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. This target remains unchanged, signaling confidence in Kroger’s potential for value growth and financial performance under its newly solidified executive leadership.
In other recent news, Kroger has been making notable strides. The company appointed David Kennerley, former CFO of PepsiCo Europe, as its new Chief Financial Officer. This development follows the retirement of the interim CFO, Todd Foley. Analyst Michael Montani of Evercore ISI has maintained an Outperform rating on Kroger’s stock with a $75 target, expressing confidence in the company’s core business and anticipating potential earnings above Wall Street’s expectations for 2025 and 2026.
On another front, Kroger Health has partnered with Express Scripts to expand prescription medication and health service access to Express Scripts customers. This agreement significantly increases the reach of Kroger’s health services, potentially impacting over 100 million people in the United States.
In terms of analyst coverage, Citi analysts have resumed coverage on Kroger with a Neutral rating and a $61 price target. This follows a hiatus due to a potential merger with Albertsons Companies (NYSE:ACI) Inc., which did not materialize. Meanwhile, JPMorgan updated its financial model for Kroger, leading to a revised price target and earnings per share estimates. Analyst Ken Goldman increased the price target for Kroger shares to $71, while maintaining an Overweight rating on the stock. These are the recent developments in the company’s journey.
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