Why the price fell today

  • Kroger Co (NYSE: KR) stock price fell more than 4.8% in intraday trading today. That’s why it happened.

Kroger Co (NYSE: KR) stock price fell more than 4.8% in intraday trading today. Investors seem to be reacting negatively to a bearish research report.

Wells Fargo analyst Edward Kelly had downgraded Kroger from an “equal weight” rating to an “underweight” rating with a price target of $42. Kelly adjusted the rating based on the idea that the favorable context for grocers cannot last. And Kelly said the risk-reward ratio for this COVID beneficiary now appears to be skewed downward.

While fourth-quarter earnings are expected to beat consensus as the omicron variant of COVID-19 prolongs what has arguably been the best backdrop for grocers in history, it simply can’t last. And the unionized grocery store is likely to remain a very difficult business long after the benefits of COVID end.

“We expect revenue momentum to stall on the combination of Omicron reopening / end of stimulus, we see risk of brewing in the commodity inflation setup , pressure on labor costs appears to be building at an inopportune time, and management appears poised to set the bar high for 2022. KR stock posted strong relative performance, but the way to keeping up seems difficult,” Kelly wrote.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.

Eleanor C. William