Deutsche Bank said investors exhibited cautious sentiment ahead of Kroger Co
Bulls Vs. Bears
The brokerage noted that bears easily outnumbered the bulls at its Kroger "Bull/Bear" lunch with investors. Apart from deflationary concerns, investors are concerned around Aldi’s recent Southern California expansion and Lidl, which plans to open a number of stores along the East Coast beginning in 2018.
Expectations Ahead Of Q3 And Beyond
Meanwhile, investors expect an
“Given continued deflation, investors agreed that gross margins likely compressed a bit more, perhaps as much 15–20 bps (more than 20 bps could be a concern),” analyst Shane Higgins wrote in a note.
Looking ahead, investors will likely be focused on any color around quarter-to-date trends and the fourth-quarter outlook. Investors expect fourth-quarter non-fuel ID guidance to be +1.0 percent or better given easier compares.
In addition, bears pointed out that it would be tough for Kroger to grow EPS within the 8–11 percent per year long-term target if
Higgins maintains a Buy rating on Kroger, with a target price of $39.
At last check, shares of Kroger fell 1.42 percent to $32.63.
|Sep 2016||Barclays||Initiates Coverage on||Equal-Weight|
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