Global Courant
According to Jefferies, Kroger still has advantages even if the deal to acquire Albertsons falls through. The company upgraded the supermarket chain to buy from neutral. It also raised its price target from $54 to $73 per share, implying an upside of more than 21% from Monday’s closing price. The company initially announced plans to acquire similar supermarket chain Albertson’s in 2022. However, regulators filed a lawsuit earlier this year to block the deal over concerns it could lead to higher prices for consumers. KR YTD pile of Kroger shares. But Jefferies analyst Rob Dickerson said food trends at Kroger stores have improved recently and serve as one of the positive catalysts in a scenario where the Albertsons deal falls through completely. Dickerson also noted that Kroger would ultimately retain the roughly $6 billion in debt it raised for the deal, which could be used for buybacks and boosting the stock. “The KR team has proven itself adept at controlling costs in a low-margin business, which bodes well for efficiency gains, synergy potential and growth potential if the proposed acquisition of ACI receives approval,” said Dickerson. ‘If not, KR will have tightened its balance sheet again, which we expect will be partly used to resume share buybacks, while at the same time producing a more profitable fuel/total business with a continued strong CFO who will also will be used for the same purposes. in our opinion,” the analyst added. After the upgrade, Kroger shares rose 1% in the premarket. So far they have gained 31.6%. Analysts are somewhat divided about the supermarket chain. LSEG data shows that 12 of the 24 analysts covering the company have a buy or strong buy rating, while the remaining 10 rate it as a hold.
