With the grocery store chain’s quarterly earnings announcement scheduled on December 1, Kroger Co. ( NYSE:KR ) has become a battlefield stock on Wall Street. With food input, labor, and transportation expenses all feeling the effects of inflation, Kroger’s gross margin may fall short of expectations for the sixth quarter.
After a robust second quarter, Wells Fargo predicts that Kroger Co. ( NYSE:KR ) will have yet another strong quarter in the third as inflation continues to fuel industry growth. The business has lifted its full-year outlook on Kroger and predicts an EPS beat, but it cautions that it will be tough for the company to please investors. According to analyst Edward Kelly, faster price increases should result in stable sales, although this factor is claimed to have peaked, and there seems to be a rising trend toward value forms. One of the most favorable backgrounds in food retail history is ready to expire in 2023, and Wells Fargo maintained its Underweight recommendation on Kroger in advance of the report.
Although food inflation is expected to remain elevated for the foreseeable future, Evercore ISI believes that the risk-reward profile for Outperform-rated Kroger stock remains positive due to further trade-down into food-at-home categories. According to analyst Dave Palmer’s prediction, recent information indicates that price hikes will continue until the first half of 2023 to sustain margins.
A total of 7 Buy recommendations, 12 Hold ratings, and 2 Sell ratings indicate that analysts...
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