Will Kroger (KR) Stock Be Affected By These Analyst Actions On Friday?

NEW YORK (TheStreet) -- The Kroger Co. (KR) was removed from America's sell list at Goldman Sachs (GS) on Friday.

The firm said it took the retail company off the list based on management's ability to execute more effectively than expected. Goldman has a "neutral" rating on the stock.

Kroger reported an increase in net income to $501 million for the 2014 first quarter, compared to $481 million from the year ago period. Net sales increased 9.9% to $32.96 billion for the most recent quarter.

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Analysts at Wells Fargo (WFC) raised their estimates on Kroger for the 2014 second quarter by two cents, and the 2014 first quarter by six cents based on the company's earnings results. Wells has a "market perform rating" on the stock.

Shares of The Kroger Co. are up 0.12% to $49.72 in pre-market trading this morning.

Separately, TheStreet Ratings team rates KROGER CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate KROGER CO (KR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, KR's share price has jumped by 37.72%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • KROGER CO's earnings per share declined by 8.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KROGER CO increased its bottom line by earning $2.90 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($3.22 versus $2.90).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, KROGER CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income has decreased by 8.7% when compared to the same quarter one year ago, dropping from $462.00 million to $422.00 million.
  • You can view the full analysis from the report here: KR Ratings Report
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