UPDATE: Credit Suisse Downgrades Kroger

In a report published Thursday, Credit Suisse analyst Edward Kelly downgraded

to Neutral from Outperform, dropping its price target to $39.00 from $48.00. According to the report, while KR remains a well managed, high quality company positioned for long-term share gains, the risk/reward seems to be deteriorating. “As detailed in our supermarket industry note published today, we have become more cautious on the sector given weakening volumes, extremely low inflation, and always intense competition against improved valuations,” the report noted. “Kroger seems particularly vulnerable given its strong performance and what now seems to be somewhat aggressive consensus estimates. We recommend investors move to the sidelines for the time being.” Some highlights from the report included: -KR not immune to industry trends -Consensus estimates look somewhat aggressive KR closed Wednesday at $39.26.