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Kroger (KR) Exceeds Market Returns: Some Facts to Consider

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In the latest market close, Kroger (KR - Free Report) reached $45.44, with a +1.84% movement compared to the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.06%. On the other hand, the Dow registered a gain of 0.13%, and the technology-centric Nasdaq increased by 0.24%.

The the stock of supermarket chain has fallen by 3.29% in the past month, lagging the Retail-Wholesale sector's gain of 8.04% and the S&P 500's gain of 6.45%.

Market participants will be closely following the financial results of Kroger in its upcoming release. In that report, analysts expect Kroger to post earnings of $1.13 per share. This would mark year-over-year growth of 14.14%. At the same time, our most recent consensus estimate is projecting a revenue of $37.27 billion, reflecting a 7.01% rise from the equivalent quarter last year.

Investors should also take note of any recent adjustments to analyst estimates for Kroger. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Kroger is currently sporting a Zacks Rank of #4 (Sell).

In terms of valuation, Kroger is currently trading at a Forward P/E ratio of 10.28. This denotes a discount relative to the industry's average Forward P/E of 12.6.

Investors should also note that KR has a PEG ratio of 2.33 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Retail - Supermarkets industry stood at 1.02 at the close of the market yesterday.

The Retail - Supermarkets industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 87, placing it within the top 35% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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