Telsey raises Kroger stock price target on strong execution

Published 23/06/2025, 10:54
Telsey raises Kroger stock price target on strong execution

Investing.com - Telsey Advisory Group raised its price target on Kroger (NYSE:KR) to $82.00 from $73.00 on Monday, while maintaining an Outperform rating on the stock. The new target represents potential upside from the current price of $71.97, with the stock already showing impressive momentum, gaining 9.03% in the past week and trading near its 52-week high of $73.63.InvestingPro analysis indicates Kroger currently trades near its Fair Value, with a GOOD overall financial health score.

The research firm cited Kroger’s strong execution in leveraging fresh and own brand assortments, its robust loyalty program, and enhanced digital capabilities as key factors behind the decision. These strengths were reflected in Kroger’s first-quarter 2025 results, which included adjusted earnings per share of $1.49, exceeding Telsey’s estimate of $1.44 and the FactSet consensus of $1.45. The company, now valued at $47.57 billion, has demonstrated consistent shareholder returns, maintaining dividend payments for 20 consecutive years with a current yield of 1.78%.

Kroger also reported identical store sales, excluding fuel, of 3.2% for the quarter, surpassing Telsey’s forecast of 2.3% and FactSet’s 2.4% projection. The company has positively revised its fiscal 2025 identical sales guidance to 2.25%-3.25% from its previous 2%-3% range, while maintaining its profit projections of adjusted earnings per share between $4.60 and $4.80.

For the second quarter of fiscal 2025, Kroger indicated that identical store sales, excluding fuel, should be around the midpoint of its raised 2025 guidance, or approximately 2.75%. Telsey noted that Kroger is operating from a position of strength, with business momentum and a solid strategy for 2025 and beyond.

The firm believes Kroger’s growth and market share gains should continue, driven by expansion into new geographies, enhanced product assortment, focus on digital experience, and building customer loyalty. Telsey also highlighted Kroger’s growth beyond food in digital, fuel, health and wellness, personal finance, and advertising/media as factors that should boost its profit profile over time. With annual revenue of $147.12 billion and a P/E ratio of 19.61, Kroger remains a prominent player in the Consumer Staples sector.Get access to 10+ additional InvestingPro Tips and comprehensive financial analysis in our detailed Pro Research Report, available exclusively to subscribers.

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 revenue miss, with $45.12 billion reported against a forecast of $45.28 billion, the company showed resilience in its performance. Kroger’s comparable sales growth reached 3.2%, exceeding consensus expectations of 2.4%. The company has raised its guidance for identical sales without fuel to a range of 2.25% to 3.25% for the year. Citi responded to Kroger’s strong performance by raising its price target from $65 to $74, while maintaining a Neutral rating. Kroger also plans to close 60 stores but intends to accelerate new store openings in 2026. The company’s e-commerce sales grew by 15%, reflecting its digital expansion efforts. These developments indicate a strategic focus on enhancing customer experience and operational efficiency.

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