Discussion in 'Stocks' started by dealmaker, Jun 17, 2017.

  1. dealmaker


    The Biggest Loser: Kroger Tumbles 9.2%
    Kroger tumbled today after getting cut by three sets of analysts. The acquisition of Whole Foods by Amazon added to its pain.
    Ben Levisohn
    June 16, 2017 6:38 p.m. ET

    Kroger(KR) tumbled to the bottom of theS&P 500today to buyWhole Foods Market(WFM).

    Kroger dropped 9.2% to $22.29 today, while the S&P 500 finished little changed at 2,433.15.

    Lost amid the noise today was the fact that Kroger was downgraded byGoldman Sachs,Telsey Advisory, andJPMorgan, even before theAmazon-Whole Foodsannouncement. JPMorgan's Ken Goldmanand Thomas Palmerexplain why they cut Kroger to Neutral from Overweight:

    Although our inflation thesis remains intact, we are incrementally concerned about (a) the cost of Kroger’s comps, (b) the lack of operating leverage in Kroger’s current model, and (c) cash flow. We also think management’s visibility is at a multi-year low, as evidenced by the string of recent guide-downs. We reduce our EPS estimate for 2017E by 11% and for 2018E by 17%, as we think the risk of an earnings rebase has substantially increased. Our December 2017 price target goes to $24 from $34 and is based on 12x P/E and 6x EV/EBITDA – similar multiples to where the stock traded for many years before its 2014-15 expansion. At $24, we think the risk/reward on the shares is balanced. Kroger remains a strong company but even strong companies have tough times when value players get aggressive.
    Kroger's market capitalization fell to $20.3 billion today from $22.4 billion yesterday. It reported net income of $2 billion on sales of $115 billion in fiscal 2017.

    Kroger was alsothe biggest loser yesterday. Irecommended avoiding KrogerinBarron's Tradercolumn over the weekend.
    victorycountry likes this.
  2. zdreg


    the key is did they downgrade weeks before the earnings announcement?
    victorycountry likes this.
  3. ET180


    Wow, these analysts...what a courageous call.
  4. Overnight


    I shant believe the hype. Kroger is going to continue to rock the retail groceries. Amazon has no idea what the heck they have just done. Whole Foods is a stupid idea, what with their overcharging and employee dissatisfaction ratings. Organic this, you yuppie morons.

    You'll get a bounce, but then you shall fall. Because you SUCK on the retail side. $5,000 for some leeks? Bugger off mates.
  5. dealmaker


  6. I like Kroger's products. They are high quality.

    For now, Kroger faces intense competition from big players such as Amazon, Wal-Mart, Safeway and Supervalu, other conventional retailers and specialty gourmet retailers in respect to price, store expansion and promotional activities.

    From the latest data, its quarterly revenue growth was 4.50%, which is not that bad, it is ok.
    dealmaker likes this.