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Investing.com - UBS raised its price target on Kroger (NYSE:KR) stock to $74.00 from $66.00 on Monday, while maintaining a Neutral rating on the grocery retailer. The stock, currently trading at $73.86, has shown remarkable momentum with a 9% gain in the past week. According to InvestingPro analysis, Kroger is trading near its Fair Value.
The price target increase follows Kroger’s first-quarter results, which UBS noted showed several positive signs including the fifth consecutive quarter of sequential acceleration in identical store sales excluding fuel. The retailer, now commanding a market capitalization of $48.8 billion, demonstrated improved execution across multiple areas of its business.
UBS highlighted Kroger’s effective profitability management, with specific improvements in shrink control, e-commerce operations, and its pharmacy business. The firm attributed these enhancements partly to Kroger’s increased focus on core operations now that merger-related distractions are "in the rear-view mirror." The company maintains a strong dividend track record, having raised its dividend for 19 consecutive years.
The research firm observed a "greater sense of urgency" at Kroger to improve competitiveness and market share trends. This renewed focus appears to be yielding positive results for the grocery chain’s performance.
Despite the improved outlook reflected in the higher price target, UBS maintained its Neutral stance on Kroger stock, noting that while opportunities exist for sustained momentum, the retailer still faces "a number of risks ahead."
In other recent news, Kroger has reported its first-quarter earnings for 2025, with earnings per share (EPS) of $1.49, surpassing analyst expectations of $1.45. Despite a slight miss on revenue, reporting $45.12 billion against a forecast of $45.28 billion, the company demonstrated strong operational efficiencies. Telsey Advisory Group raised its price target on Kroger to $82.00 from $73.00, citing strong execution in leveraging fresh and own brand assortments, alongside a robust loyalty program. Similarly, Morgan Stanley (NYSE:MS) increased its price target to $76.00 from $71.00, highlighting Kroger’s accelerating top-line growth and limited tariff exposure as positive factors.
Citi also raised its price target to $74.00 from $65.00, maintaining a Neutral rating after Kroger exceeded consensus expectations with a 3.2% growth in comparable sales. The company has revised its fiscal 2025 identical sales guidance to 2.25%-3.25%, up from the previous 2%-3% range. Kroger’s digital expansion efforts are evident with a 15% growth in e-commerce sales, contributing to its strong first-quarter performance. Additionally, Kroger plans to close 60 stores but will accelerate new store openings in 2026, reflecting strategic adjustments in its store operations.
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