Boosting US Grocery Leadership: Analyst Highlights How Kroger's Acquisition Of Albertsons Enhances Its Market Position

Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on the shares of Kroger Co KR with a $55 price target.

Kroger is scheduled to report 1Q23 earnings on Thursday, June 15.

The analyst expects solid 1Q23 earnings, given continued strong at-home food consumption trends, inflation, and gains from strategic initiatives.

The analyst backed the statement with the fact that U.S. Census Bureau Food & Beverage Stores retail sales were +2.9% in April, +5.0% in March, and +5.8% in February and Food-At-Home CPI was up +7.1% in April, +8.4% in March, and +10.2% in February.

The analyst projects 1Q EPS of $1.43. The company specified that unlike Target Corp TGT and Walmart Inc. WMT, Kroger should not see the pressure related to the slowdown in demand for discretionary products and related inventory clearance.

Also, the analyst added that recent earnings reports from other retailers indicated strong demand for groceries.

The analyst believes Kroger should benefit from its Leading with Fresh and Accelerating with Digital initiatives.

Kroger’s growth and market share gains should be driven by expanding into new geographies, enhancing its product, focusing on a seamless digital experience, and building loyalty.

The analyst suggested that Kroger’s acquisition of Albertsons Companies, Inc. ACI should further solidify its leadership in U.S. grocery, with the combined company being more productive and profitable.

Price Action: KR shares are trading higher by 1.15% at $46.29 on the last check Friday.

Photo Via Company