Goldman Sachs Suggest Buying Strangles on The Kroger Co. (KR)

Goldman Sachs is out with a research note this morning, where it suggests that traders buy strangles on The Kroger Co. KR ahead of earnings. Goldman Sachs Retail analyst, Adrianne Shapira, rates KR shares as a Buy and sees 8% upside to her 12-mth price target of $25. She expects KR to report 4Q EPS of $0.43 vs Street $0.44 and estimates Jan-12 EPS of $1.90 vs Street $1.92. The analysts note that KR has moved +/- 6% in 4 of the past 8 qtrs. The analysts suggest buying the July $22/23 strangle for $2.50. The Kroger Co. is a retailer in the United States. The company also manufactures and processes some of the food for sale in its supermarkets. As of January 30, 2010, the company operated, either directly or through its subsidiaries, 2,468 supermarkets and multi-department stores, 893 of which had fuel centers.