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Investing.com - Guggenheim has reiterated its Buy rating and $78.00 price target on Kroger (NYSE:KR) stock, highlighting the company’s new plan to reduce e-commerce losses. This target aligns with InvestingPro data showing Kroger is currently trading at $67.38, with analyst targets ranging from $65 to $85.
The firm noted that Kroger’s comprehensive strategy to "significantly curtail direct e-commerce losses" has already driven nearly 300 basis points of relative outperformance in the stock, supporting the continued Buy recommendation. This performance contributes to Kroger’s impressive 18.33% total return over the past year.
Kroger plans to achieve approximately $400 million in e-commerce EBIT loss reductions by 2026, though Guggenheim expects a significant portion of these savings will likely be reinvested in pricing and labor costs. For a company generating $147 billion in revenue with an $8 billion EBITDA, these efficiency improvements could be meaningful.
The research firm identified this e-commerce strategic review as the first of three potential catalysts for Kroger, with the other two being a new CEO hire and the redeployment of $5 billion in cash to shareholders. InvestingPro data reveals Kroger has raised its dividend for 20 consecutive years with 9.38% dividend growth, suggesting a strong commitment to shareholder returns. Access Kroger’s comprehensive Pro Research Report to discover 7 more exclusive insights about this consumer staples leader.
Guggenheim’s $78 price target represents approximately 18% upside potential from current levels, which the firm describes as "a solid potential return in a challenging macro backdrop," with Kroger currently trading at just 6.7x Guggenheim’s 2026 estimated EBITDA. According to InvestingPro’s Fair Value assessment, Kroger appears slightly undervalued, though its PEG ratio of 6.2 suggests it’s trading at a high P/E relative to near-term earnings growth.
In other recent news, Kroger Co . announced updates to its eCommerce strategy, which includes plans to close three automated fulfillment centers in Pleasant Prairie, Wisconsin; Frederick, Maryland; and Groveland, Florida by January 2026. The company anticipates these changes will improve profitability by approximately $400 million in 2026, though it will incur charges of about $2.6 billion in the third fiscal quarter of 2025 due to these closures. Additionally, Kroger and Uber Technologies have expanded their partnership to offer a combined grocery and food delivery experience, allowing customers to access Kroger’s full product range through the Uber Eats app starting in early 2026. This partnership will also integrate Uber Eats’ restaurant selection into the Kroger app, providing special benefits like free Uber One membership trials and discounts for Kroger’s paid members. In preparation for the holiday season, Kroger plans to hire over 18,000 associates for various positions across its companies. Moreover, Kroger’s Board of Directors declared a quarterly dividend of 35 cents per share, payable on December 1, 2025. The company highlighted that its dividend has grown at a 13% compounded annual growth rate since 2006 and expects continued increases, subject to board approval.
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