UPDATE: Citigroup Initiates Coverage on The Kroger Co. with Buy Rating, $76 PT as Highest Conviction Stock Pick

In a report published Wednesday, Citigroup analyst Alvin C. Concepcion initiated coverage on

with a Buy rating and $76.00 price target. In the report, Citigroup noted, “We are initiating coverage of Kroger with a Buy rating and $76 target price, which represents a ~25% ETR. We expect KR to benefit from continued solid SSS growth of ~3% over the next few years, driven by a continued focus on innovation, effective marketing, and a stronger economic backdrop. The SSS leverage, combined with margin enhancing opportunities such as increased private label mix and natural/organic mix, should drive ~10% EPS growth over the next 3 years. Valuation is attractive in light of these growth prospects, so we expect decent stock upside over the next year. Kroger is our highest conviction stock pick in our Food and Drug Retail Chain coverage.” The Kroger Co. closed on Tuesday at $61.49.