A team led by analyst Christopher Mandeville cut its price target on the Cincinnati chain to $26 from $29.
Kroger's stock on Thursday fell 2.8% to $23.84.
While the stock has risen 18% from July, Mandeville sees nothing that will significantly drive comparable-sales growth in fiscal 2020.
"We're hard-pressed to think of what management can say at its Nov. 4 Investor Day to excite us," the report said.
Jefferies is particularly critical of Kroger's $247 million deal last year to snap up a 5% stake in online British grocer Ocado Group, arguing it has yet to yield greater efficiency or lower pricing, despite the promise of automated warehouses.
The pact with Ocado "is a poor and significant long-term-capital-allocation misstep when compared to microfulfillment," the analysts at Jefferies wrote.