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UPDATE: Goldman Sachs Downgrades Kroger on Continued Downside

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In a report published Friday, Goldman Sachs analyst Stephen Grambling downgraded the rating on Kroger (NYSE: KR) from Neutral to Sell, but raised the price target from $32.00 to $35.00.

In the report, Goldman Sachs noted, “We are downgrading The Kroger Co. (KR) to Sell from Neutral with 7% downside to our new $35, 12-month price target vs. 1% average upside for our coverage. We see unfavorable risk/reward as the shares now trade at a premium valuation relative to their history (13X NTM P/E vs. 5-yr average of 11.4X), industry tailwinds are fading, and our analysis suggests the market may already be pricing in upside to management's HTSI accretion guidance. We believe core EBITDA growth (excluding any acquisitions or synergies) will moderate amidst a soft industry backdrop, making the elevated valuation tough to sustain.”

Kroger closed on Thursday at $37.79.

Latest Ratings for KR

DateFirmActionFromTo
Sep 2014BarclaysMaintainsEqual-weight
Sep 2014Deutsche BankMaintainsBuy
Sep 2014JP MorganMaintainsOverweight

View More Analyst Ratings for KR
View the Latest Analyst Ratings

Posted-In: Goldman Sachs Stephen GramblingAnalyst Color Downgrades Analyst Ratings

 

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