Traders Buy High Volume of Kroger Call Options (NYSE:KR)

Key Points

• Kroger saw unusually heavy options activity on Friday, with traders buying 28,011 call options — about 126% above its normal daily volume.
• Analysts remain mixed on the stock, but the broader view is still “Moderate Buy” with a consensus target price of $72.00, even as several firms recently trimmed their price targets.
• Kroger is also drawing attention from investors and news flow thanks to a proposed Giant Eagle acquisition, a recent dividend hike to $0.39 per share quarterly, and ongoing institutional ownership that now stands above 80%.

The Kroger Co. (NYSE:KR - Get Free Report) was the recipient of unusually large options trading activity on Friday. Traders purchased 28,011 call options on the stock. This is an increase of 126% compared to the typical daily volume of 12,402 call options.

Wall Street Analyst Weigh In

A number of research analysts have recently commented on the stock. Citigroup decreased their price objective on shares of Kroger from $71.00 to $61.00 and set a "neutral" rating for the company in a research report on Tuesday, June 23rd. HC Wainwright reaffirmed a "buy" rating on shares of Kroger in a report on Thursday, July 2nd. UBS Group set a $63.00 target price on shares of Kroger and gave the company a "neutral" rating in a research note on Monday, June 22nd. Morgan Stanley reduced their price target on Kroger from $73.00 to $67.00 and set an "equal weight" rating for the company in a report on Monday, June 22nd. Finally, Evercore reissued an "outperform" rating and set a $78.00 price target on shares of Kroger in a research report on Tuesday. Ten analysts have rated the stock with a Buy rating and nine have given a Hold rating to the company's stock. According to data from MarketBeat, Kroger has a consensus rating of "Moderate Buy" and a consensus target price of $72.00.

Institutional Investors Weigh In On Kroger

Hedge funds and other institutional investors have recently made changes to their positions in the business. Connor Clark & Lunn Investment Management Ltd. raised its position in shares of Kroger by 45.5% in the 3rd quarter. Connor Clark & Lunn Investment Management Ltd. now owns 855,810 shares of the company's stock valued at $57,690,000 after buying an additional 267,434 shares in the last quarter. Te Ahumairangi Investment Management Ltd boosted its position in shares of Kroger by 18.1% during the 3rd quarter. Te Ahumairangi Investment Management Ltd now owns 150,356 shares of the company's stock worth $10,135,000 after acquiring an additional 23,027 shares in the last quarter. JCP Investment Management LLC acquired a new stake in shares of Kroger during the 3rd quarter worth approximately $1,773,000. Allstate Corp increased its stake in Kroger by 108.5% in the fourth quarter. Allstate Corp now owns 47,991 shares of the company's stock valued at $2,998,000 after acquiring an additional 24,976 shares during the last quarter. Finally, Vanguard Group Inc. increased its stake in Kroger by 1.1% in the fourth quarter. Vanguard Group Inc. now owns 77,169,425 shares of the company's stock valued at $4,821,546,000 after acquiring an additional 868,529 shares during the last quarter. 80.93% of the stock is currently owned by institutional investors and hedge funds.

Kroger Stock Performance

Shares of Kroger stock traded up $1.13 on Friday, hitting $60.99. The stock had a trading volume of 3,156,616 shares, compared to its average volume of 6,958,934. 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 business's 50 day moving average is $62.65 and its two-hundred day moving average is $65.77. Kroger has a twelve month low of $54.15 and a twelve month high of $76.58. The stock has a market cap of $37.36 billion, a price-to-earnings ratio of 35.85, a price-to-earnings-growth ratio of 1.59 and a beta of 0.44.

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

Kroger Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, September 1st. Shareholders 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 2.6%. The ex-dividend date is Friday, August 14th. This is a boost from Kroger's previous quarterly dividend of $0.35. Kroger's dividend payout ratio (DPR) is currently 82.35%.

Key Stories Impacting Kroger

Here are the key news stories impacting Kroger this week:

• Positive Sentiment: Kroger is making progress on its reported $1.65 billion acquisition of Giant Eagle, a move that could expand its footprint across several states and deepen its market share if regulators approve the transaction. Article Title
• Positive Sentiment: Analysts and local reports suggest the deal could create valuable store-optimization opportunities, including selective divestitures in Columbus, which may ease antitrust concerns and improve Kroger’s competitive position. Article Title
• Positive Sentiment: Kroger is also investing in store upgrades, including expanding wine selections at 147 in-store shops, which supports the company’s ongoing effort to improve traffic and basket size. Article Title
• Neutral Sentiment: Coverage around how Kroger will handle Giant Eagle’s plastic bag ban is adding some uncertainty, but the company has not yet said the policy will change. Article Title
• Negative Sentiment: Separately, Kroger was reported to be walking back its cage-free egg pledge, which could create reputational pressure and raise questions about its sustainability commitments. Article Title

Kroger Company Profile

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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