Morgan Stanley Reports Kroger CFO Optimistic (KR)

Morgan Stanley has issued a report on the state of Kroger KR to handle price inflations in the opinion of KR's CFO. According to the report, "Echoing statements from its 4Q, food inflation is in its early stages, grocers have been rational in passing it through, and, so far, consumers appear to be taking the price increases in stride. In our view, Kroger, as the lowest priced conventional grocer, is well positioned to manage inflation. We believe the coming inflation will be a margin problem for Supervalu (rated Underweight) which is attempting to cut price just as inflation is driving up costs, and we believe it could delay a comp turnaround for Safeway (rated Underweight), which has been trying to improve its price image." KR is rated Equal-Weight and closed at $24.29 yesterday.