Analyst Michael Lasser from UBS maintained a Hold rating on Kroger Company and keeping the price target at $74.00.
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Michael Lasser has given his Hold rating due to a combination of factors that reflect Kroger’s current strategic adjustments and market conditions. The company is actively refining its business operations, particularly in eCommerce, to adapt to a shifting retail landscape. While these efforts show promise in potentially enhancing the company’s profitability and sustainability, there are concerns about the aggressive expansion with Ocado sheds, which have not yet achieved the necessary volume and density to be economically viable.
Despite these challenges, Kroger is taking steps to optimize its fulfillment strategy by exploring automated micro-fulfillment solutions and expanding partnerships with third-party services like Instacart and DoorDash. The anticipated savings from streamlining eCommerce operations are expected to be reinvested into the business, which could benefit long-term growth. However, the lack of an updated 2025 outlook and the ongoing adjustments suggest a cautious approach, justifying the Hold rating as the company navigates these transitions.
In another report released today, Barclays also maintained a Hold rating on the stock with a $75.00 price target.