Kroger's 3Q Results In-Line With Estimates

Deutsche Bank has published a research report on The Kroger Co. KR after the company reported 3Q results that were in-line with consensus. In the report, Deutsche Bank writes "Q3 EPS was in-line with Consensus, and mgmt narrowed FY10 EPS guidance, though w/ a wide range, reflecting uncertainty. ID sales, ex-fuel, were a bit below Consensus, though they've improved Q4-to-date. Q3 op margins expanded and were about in-line with our est, driven by expense leverage, while non-fuel selling GMs declined. The competitive environment hasn't deteriorated, but remains tough. We expect KR to realize solid ID sales, op margin improvement, and EPS growth in Q4 and into FY11. Valuation is attractive." Deutsche Bank maintains its Buy rating and $26 price target. The Kroger Company closed yesterday at $21.63.