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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Kroger Co. To summarize, we found that Kroger Co ranked in the 73th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 338% on a DCF basis. The most interesting components of our discounted cash flow analysis for Kroger Co ended up being:
The company has produced more trailing twelve month cash flow than 88.08% of its sector Consumer Defensive.
Kroger Co's weighted average cost of capital (WACC) is 6%; for context, that number is higher than only 2.61% of tickers in our DCF set.
KR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 2.61% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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The Kroger Co. (KR) is currently trading at a very attractive forward earnings multiple that's well below those of its peers, as well as players in the broader consumer staples segment. This and other considerations, as covered in this article, point to healthy long-term total returns for Kroger investors. Thesis:...
Beulah Meriam K on Seeking Alpha | September 28, 2020
ROMULUS, Mich. , Sept. 28, 2020 /PRNewswire/ -- The Kroger Co. (NYSE: KR ), America's largest grocery retailer, and Ocado (LSE: OCDO), a world leader in technology for grocery ecommerce, today announced Romulus, MI , as the latest location for a Customer Fulfillment Center (CFC). The location confirms a previous announcement stating Kroger and Ocado would construct a CFC in the Great Lakes Region . "Kroger is incredibly excited to develop one of our industry-leading Customer Fulfillment Centers in Michigan in relationship with Ocado to bring fresh food to our customers faster than ever before," said Robert Clark , Kroger's senior vice president of supply chain, manufacturing and sourcing. "We continue to invest in and constantly improve our e-commerce capabilities, focusing on cost-effe...
Kroger (KR) shares have done well year-to-date, but I would be hesitant about buying into the medium- to longer-term story. Competition has been intense in the space, with the company losing share to Walmart (WMT) in recent years, and I think the dynamic will continue to limit upside to identical...
Opal Investment Research on Seeking Alpha | September 26, 2020