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Kroger, Walgreens and Walmart Climb as Investors Seek Defensive Stocks

Kroger, Walmart and Walgreens Boots Alliance are climbing as investors seek defensive stocks.
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Kroger  (KR) - Get Kroger Company (The) Report, Walmart  (WMT) - Get Walmart Inc. Report and Walgreens Boots Alliance  (WBA) - Get Walgreens Boots Alliance Inc. Report were advancing Wednesday while the overall markets were tumbling as investors sought refuge from the impact of the coronavirus pandemic in so-called defensive stocks.

Walgreens was biggest gainer on the Dow Jones Industrial Average and the Nasdaq, and was second biggest on the S&P 500 in late trading.

The Deerfield, Ill., drugstore chain said Wednesday that it was reducing store hours to clean, sanitize and stock shelves. Its shares were climbing 3.7% to $51.44.

Walmart shares were advancing 2.3% to $122 after Credit Suisse analyst Seth Sigman upgraded the discount store operator to outperform from neutral with a price target of $127, up from $115.

Sigman said the rating change reflects a more defensive near-term view on U.S. retail amid Covid-19 concern.

In addition, he sees this challenging period speeding structural changes in consumer shopping, possibly by five-plus years, as they are introduced to new retailers and new shopping methods, including online grocery and delivery, and further consolidate purchases at multicategory, multichannel retailers. 

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This change should be sticky, Sigman said, and favor Walmart, since the retail giant has invested in its infrastructure, technology and people, to evolve its model.

Kroger shares were advancing as Telsey Advisory analyst Joseph Feldman upgraded the nation’s largest grocery chain to outperform from market perform with a $39 price target.

The shares had been slumping for several years in the face of  intense competition from online grocery shopping, but the stock has rebounded since July. Earlier this month Kroger reported fourth-quarter earnings that beat analysts’ estimates.

Shares were up 2.4% to $33.79.