Market Overview

For Kroger, Food Deflation Headwinds Subside As Wal-Mart Competition Picks Up

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For Kroger, Food Deflation Headwinds Subside As Wal-Mart Competition Picks Up
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In anticipation of Kroger Co (NYSE: KR)'s Q3 report on Thursday, BMO Capital Markets analyst Kelly Bania maintains a Market Perform rating and a $35 price target for the food retailer, while slightly adjusting her thesis.

Analyst's Take

The analyst downgraded the stock in August to address the accelerating food deflation. Although Bania anticipates the deflation turning around following October’s trough and deceleration is likely, the increased volume Wal-Mart Stores, Inc. (NYSE: WMT) has gained may be a headwind for Kroger and other food retailers.

“We believe the competitive dynamics from industry-leader WMT may be shifting,” said Bania. “This analysis suggests that Wal-Mart’s implied grocery volumes have accelerated in the past few quarters.”

At time of writing, shares of Kroger were trading down by more than 1 percent at $33.28.

Image Credit: By mcsquishee [CC BY 2.0], via Wikimedia Commons

Latest Ratings for KR

DateFirmActionFromTo
Mar 2017UBSInitiates Coverage OnNeutral
Mar 2017RBC CapitalUpgradesSector PerformOutperform
Mar 2017Northcoast ResearchDowngradesBuyNeutral

View More Analyst Ratings for KR
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Posted-In: BMO Capital Markets Kelly BaniaAnalyst Color News Reiteration Analyst Ratings Movers Best of Benzinga

 

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