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
Jun 2017Morgan StanleyDowngradesOverweightEqual-Weight
Jun 2017JP MorganDowngradesOverweightNeutral
Jun 2017Telsey Advisory GroupDowngradesOutperformMarket Perform

View More Analyst Ratings for KR
View the Latest Analyst Ratings

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

 

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