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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
May 2016Credit SuisseMaintainsNeutral
May 2016Piper JaffrayInitiates Coverage onUnderweight
May 2016SunTrust Robinson HumphreyInitiates Coverage onNeutral

View More Analyst Ratings for KR
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Posted-In: Goldman Sachs Stephen GramblingAnalyst Color Downgrades Analyst Ratings

 

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