Stock Traders Purchase High Volume of Call Options on Kroger (NYSE:KR)

Key Points

• Kroger saw unusually heavy call-option activity: Traders purchased 36,013 call options, 168% above the typical daily volume of 13,460, signaling heightened interest in the stock’s potential upside.
• Analyst views remain broadly positive, with a consensus “Moderate Buy” rating and an average price target of $72, although targets range from $61 to $80. Kroger shares traded at $57.26, near the lower end of their 12-month range.
• Kroger increased its quarterly dividend from $0.35 to $0.39 per share, equivalent to a 2.7% annualized yield, while reporting quarterly revenue of $46.12 billion and EPS of $1.58, just below analyst expectations.

The Kroger Co. (NYSE:KR - Get Free Report) was the recipient of some unusual options trading on Thursday. Traders bought 36,013 call options on the stock. This represents an increase of 168% compared to the typical daily volume of 13,460 call options.

Analysts Set New Price Targets

A number of brokerages have recently commented on KR. Citigroup lowered their price target on Kroger from $71.00 to $61.00 and set a "neutral" rating on the stock in a report on Tuesday, June 23rd. Telsey Advisory Group set a $78.00 price objective on shares of Kroger and gave the stock an "outperform" rating in a report on Monday, June 22nd. Jefferies Financial Group reissued a "buy" rating and set a $80.00 target price on shares of Kroger in a research note on Wednesday, June 3rd. Evercore restated an "outperform" rating and set a $78.00 price target on shares of Kroger in a research report on Tuesday, July 7th. Finally, Barclays set a $61.00 price objective on shares of Kroger and gave the company an "equal weight" rating in a report on Monday, June 22nd. Ten equities research analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company's stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $72.00.

Kroger Price Performance

Kroger stock traded down $1.25 during midday trading on Thursday, hitting $57.26. The company's stock had a trading volume of 2,442,305 shares, compared to its average volume of 6,869,312. The company has a quick ratio of 0.39, a current ratio of 0.79 and a debt-to-equity ratio of 2.43. The stock's 50-day moving average price is $57.61 and its 200-day moving average price is $64.57. Kroger has a 12 month low of $54.15 and a 12 month high of $76.58. The company has a market capitalization of $35.08 billion, a PE ratio of 33.74, a price-to-earnings-growth ratio of 1.57 and a beta of 0.43.

Kroger (NYSE:KR - Get Free Report) last released its earnings results on Thursday, June 18th. The company reported $1.58 EPS for the quarter, missing the consensus estimate of $1.59 by ($0.01). The business had revenue of $46.12 billion for the quarter, compared to analyst estimates of $45.59 billion. Kroger had a net margin of 0.71% and a return on equity of 44.33%. The firm's revenue for the quarter was up 2.2% on a year-over-year basis. During the same period in the prior year, the company earned $1.49 earnings per share. Kroger has set its FY 2026 guidance at 5.100-5.30 EPS. Analysts anticipate that Kroger will post 5.21 earnings per share for the current fiscal year.

Kroger Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, September 1st. Stockholders of record on Saturday, August 15th will be given a dividend of $0.39 per share. This represents a $1.56 dividend on an annualized basis and a dividend yield of 2.7%. This is a boost from Kroger's previous quarterly dividend of $0.35. The ex-dividend date of this dividend is Friday, August 14th. Kroger's payout ratio is presently 91.76%.

Hedge Funds Weigh In On Kroger

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Financial Engines Advisors L.L.C. grew its stake in shares of Kroger by 4.5% during the fourth quarter. Financial Engines Advisors L.L.C. now owns 3,537 shares of the company's stock worth $221,000 after acquiring an additional 153 shares during the last quarter. PFG Investments LLC raised its position in shares of Kroger by 3.3% in the 1st quarter. PFG Investments LLC now owns 4,899 shares of the company's stock valued at $354,000 after purchasing an additional 157 shares during the last quarter. Smartleaf Asset Management LLC raised its position in shares of Kroger by 1.5% in the 4th quarter. Smartleaf Asset Management LLC now owns 10,747 shares of the company's stock valued at $674,000 after purchasing an additional 162 shares during the last quarter. Stephens Inc. AR raised its stake in Kroger by 1.0% in the 4th quarter. Stephens Inc. AR now owns 17,995 shares of the company's stock worth $1,124,000 after acquiring an additional 174 shares during the last quarter. Finally, ROI Financial Advisors LLC raised its stake in Kroger by 2.0% in the 1st quarter. ROI Financial Advisors LLC now owns 8,943 shares of the company's stock worth $647,000 after acquiring an additional 175 shares during the last quarter. Institutional investors and hedge funds own 80.93% of the company's stock.

About Kroger

The Kroger Co NYSE: KR is one of the largest supermarket operators in the United States, offering a wide range of retail grocery and related services. Founded in Cincinnati in 1883 by Bernard Kroger, the company operates a portfolio of supermarket and multi-department store banners and provides customers with fresh foods, packaged groceries, deli and bakery items, meat and seafood, produce, and prepared foods. Kroger's stores commonly include pharmacy services and fuel centers, positioning the company as a broad-based neighborhood retail destination for everyday needs.

In addition to traditional in-store retailing, Kroger manufactures and distributes a variety of private-label brands and operates its own food production and supply-chain facilities.

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