UPDATE: J.P. Morgan Raises PT on Kroger Following Recent Earnings
In a report published Friday, J.P. Morgan analyst Ken Goldman reiterated a Neutral rating on Kroger (NYSE: KR), and raised the price target from $35.00 to $38.00.
In the report, J.P. Morgan noted, “Following recent earnings, we are reiterating our Neutral rating but raising estimates. The company continues to boast stable growth despite somewhat uncertain macroeconomic and industry trends. And we see less gross margin pressure going forward due to a combination of reduced input cost pressure, improved management of price investments, and the benefit from generic drugs. We thus raise our FY13E and FY14E earnings estimates. In addition, we are raising our valuation multiples slightly as we believe Kroger's steady performance warrants a greater premium versus its traditional grocer peers (and less of a discount vs. the non-conventional grocers). Our Dec-13 price target goes to $38 from $35. Over the long run, we think traditional grocers will continue to cede share; however, for investors seeking stable growth at a more than reasonable price, KR probably should be considered.”
Kroger closed on Thursday at $34.71.
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