Kroger operates as a retailer in the United States and internationally. It also manufactures and processes food for sale in its supermarkets. The company was founded in 1883 and is based in Cincinnati, Ohio.
KR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for KR, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Kroger Co ranked in the 76th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Kroger Co, consider:
The company's balance sheet shows it gets 56% of its capital from equity, and 44% of its capital from debt. Its equity weight surpasses that of just 18.73% of free cash flow generating stocks in the Consumer Defensive sector.
Kroger Co's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 1.74% of tickers in our DCF set.
KR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than merely 1.74% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Defensive that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as KR, try PSMT, GPX, DIT, OLLI, and STKL.
The race is revving up at grocery aisles across America to add “smart” shopping carts that can track what consumers pick up off the shelves and allow them to pay without standing in line. Kroger recently became the latest entrant when it rolled out new “KroGO” shopping carts on a test basis at its Madeira, […]
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Kroger (KR) doesn’t need much introduction as it is the second grocer by sales in the US. US grocers list – Source: Food Industry Revenues (1) have been flat over the last years if we exclude the recent COVID boom. Margins (2) and net income have been volatile but what...