2023-03-20 09:33:45 ET
Kroger Co. ( NYSE: KR ) was upgraded to Buy from Hold at Northcoast Research despite the overhang from its challenged acquisition of Albertsons Companies ( ACI ).
Equity analyst Charles Cerankosky said the “transaction is far enough into the future, such that we think investors should focus on the value of the Kroger stock on its own merits as demonstrated in the recently reported fourth quarter.” He added that consumers remain loyal to the chain based upon its “personalized promotions” available to shoppers. The balance sheet also appears healthy in anticipation of the merger, according to Cerankosky.
“Kroger is seeing pressure on discretionary categories, especially at its Fred Meyer stores,” he acknowledged. “Yet, it has offsets to these that consumers appreciate: discounted fuel for loyal members and an extremely well-developed own-brands program.”
He assigned a $60 price target to the stock alongside the upgrade to Buy. Shares of Kroger ( KR ) rose 1.75% at the market open on Monday.
Read more on the company’s recent presentation at the Bank of America retail conference .
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Kroger raised to Buy at Northcoast Research despite Albertsons deal uncertainty