NEW YORK (TheStreet) -- Shares of Kroger (KR) - Get Report were increasing in early-morning trading on Friday as Barclays started coverage of the stock with an "equal weight" rating and $33 price target.
The firm called the Cincinnati-based food and drug store operator one of its "stable staples," or companies that are gaining positive traffic and have "appropriate" long term strategies.
Other companies labeled as stable staples include Walmart (WMT), Costco (COST) and Performance Food Group (PFGC).
Barclays said sentiment toward the food and staples retailing industry remains negative, as many stocks in the sector are down year-to-date.
"The third quarter is set to be the most challenging for food retailers in well over a decade as they grapple with deflation on top of deflation year over year - a phenomenon not experienced since 1960," the firm said in an analyst note. "This headwind coincides with Walmart's re-emergence as a disruptor, so the combination has the potential to wreak havoc on many companies in our universe."
As a result, Barclays added that several companies are likely to remain "range-bound" for several quarters.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Kroger as a Buy with a ratings score of B. This is driven by a number of strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its revenue growth and notable return on equity. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: