Kroger Company (KR – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Simeon Gutman from Morgan Stanley maintained a Hold rating on the stock and has a $65.00 price target.
Simeon Gutman has given his Hold rating due to a combination of factors that reflect both opportunities and challenges for Kroger Company. The company’s underlying fundamentals are showing signs of improvement, with growth in ID and FIFO EBIT gaining momentum, which is valuable in the current uncertain macroeconomic and consumer environment. The guidance for 2025 looks achievable, with expectations of acceleration supported by higher food inflation and positive volume growth. Additionally, Kroger’s limited exposure to tariff risks and its defensive business model are seen as advantages in a volatile market.
However, there are several uncertainties that balance the risk and reward for Kroger’s stock. The leadership changes, including transitions in the CEO and CFO positions, and the blocked merger with ACI introduce elements of unpredictability. Furthermore, while Kroger’s defensive nature is beneficial, it is not entirely shielded from macroeconomic shifts and changes in consumer sentiment, which could affect its top-line performance. These factors contribute to the balanced outlook, leading to the Hold rating.
In another report released yesterday, Roth MKM also maintained a Hold rating on the stock with a $58.00 price target.