Kroger stock price target lowered to $80 at Telsey on macro uncertainty

Investing.com - Telsey Advisory Group has lowered its price target on Kroger (NYSE:KR) to $80.00 from $82.00 while maintaining an Outperform rating on the stock. The new target represents a 27% upside from Kroger’s current price of $63.14.

The firm cited higher macroeconomic uncertainty and Kroger’s emerging e-commerce strategy that relies on third-party partners as reasons for the $2 reduction in its 12-month price target.

Despite the lower target, Telsey expects Kroger’s growth and market share gains to continue, driven by geographic expansion, enhanced product assortment, digital experience improvements, and loyalty-building initiatives. According to InvestingPro data, Kroger’s management has been aggressively buying back shares, potentially signaling confidence in the company’s future performance.

The research firm noted that Kroger is expanding beyond food into digital services, fuel, health and wellness, personal finance, and advertising/media sectors, which should improve the company’s profit profile over time. Kroger has maintained a strong dividend track record, having raised its dividend for 20 consecutive years with a current yield of 2.22%.

Telsey’s new price target is based on applying an enterprise value to EBITDA multiple of approximately 7.5 times to its 2026 EBITDA estimate of about $8.8 billion for the grocery retailer. Currently, Kroger trades at an EV/EBITDA multiple of 7.74 times its last twelve months EBITDA of $8.03 billion. InvestingPro analysis indicates Kroger is undervalued, with additional metrics and insights available in the Pro Research Report covering this prominent player in the Consumer Staples industry.

In other recent news, Kroger reported its third-quarter earnings for fiscal year 2026, with an adjusted earnings per share (EPS) of $1.05, slightly above analysts’ expectations of $1.03. However, the company’s revenue fell short of projections, totaling $33.9 billion against the anticipated $34.28 billion. This revenue shortfall has raised concerns among investors, despite the modest EPS beat. BMO Capital maintained its Market Perform rating on Kroger, with a price target of $70. The firm described Kroger’s quarterly performance as "mixed," highlighting softer-than-expected identical store sales but noting stronger gross margins. BMO also suggested that Kroger’s key grocery market share trends might have seen marginal improvement during the period. These developments reflect ongoing challenges and opportunities for Kroger in the competitive grocery market.

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