Is Kroger stock (NYSE:KR) a good purchase right now as it prepares to report earnings? Well, Here are the findings of fundamental and technical analysis.
Earnings at Kroger Exceeded Expectations
On September 9, the supermarket behemoth reported second-quarter profits, which increased 13% to 90 cents. According to Zacks Investment Research, this topped analyst projections of 81 cents. Revenue increased by 9% to $34.64 billion, above expectations.
The company also raised its full-year forecast. The company expects adjusted EPS of $3.95 to $4.05, up from $3.85 to $3.95. This was also higher than the consensus estimate of $3.96.
Kroger Stock Evaluation
According to MarketSmith analysis, Kroger, a retail stock, has yet to create a new base. Following the release of its earnings report, it fell below its 50-day moving average, indicating a sell signal.
Kroger stock (NYSE:KR) relative strength line has also been slipping. The RS line compares a stock’s performance to the S&P 500 index.
Kroger stock (NYSE:KR) has been down a little more than 1% since the beginning of the year. It has given up gains for the year but is still outperforming the S&P 500, which has lost roughly 24% in 2022.
The Retail-Super/Mini Markets Industry Group includes Kroger. This is now ranked seventh among the 197 groups monitored by IBD. This is a promising indicator.
Kroger’s Earnings Rise.
According to the Stock Checkup Tool, the company’s profits have recently increased. EPS has increased by 16% on average over the last three quarters. This is less than the 25% growth rate desired by the CAN SLIM elite.
However, a four-quarter streak of rising profits growth came to an end with the company’s most recent report. The rate of EPS growth has dropped from 22% to 13%.
Longer-term growth is stronger, with profits increasing by 25% on average over the last three years. Analysts predict that full-year EPS will rise 10% in fiscal 2023 before falling to a 2% increase in fiscal 2024.
Analyst Sees Problems With Kroger Stock
Kroger stock (NYSE:KR) is rated a sell by CFRA analyst Arun Sundaram, with a price objective of 36. He thinks several investors fled after the company’s most recent report.
“KR’s second results beat on the top and bottom lines, and KR raised guidance,” he wrote in a research note on September 10. “However, the shares are trading lower, which we believe is due to 1) weaker-than-expected gross margins; 2) lower share repurchases vs. F1Q; 3) moderating digital growth, and 4) profit taking after a strong run this year.”
Is Kroger Stock a Good Investment?
Kroger stock (NYSE:KR) is not a good investment right now. It now does not provide an entry point and has gone below the crucial 50-day moving average, indicating a sell signal.
While its performance in 2022 has been stronger than the S&P 500, its gains for the year have vanished.
Featured Image – Unsplash © mikepetrucci
Author Okoro Chinedu 
