The Kroger Company (NYSE:KR) has an upcoming earnings release scheduled for June 16th. The stock is currently trading at $52. We think the stock will beat Q1 earnings expectations. As a result, the stock is likely to test a new high after the earnings.
The retail industry has in the recent past released reports showing increases in revenues. The increases were against declining or flat EPS. This has been due to the impacts of inflation. Investors wait to see whether Kroger will break away from the pattern.
Kroger is both a value stock and a growth stock. Our analysis shows that Kroger is likely to beat earnings expectations. The company could report growth in both revenues and EPS. Kroger has in the recent past shown a strong tendency to beat analyst expectations. The company has a projected forward PE of 13.56.
Kroger has support and resistance at $52 and $62
Source – TradingView
Technical analysis shows that the company has support at $52 and resistance at $62. The resilience of these levels will depend on the performance of the company. The stock is likely to pivot from $52 to find a new high between $62 and $65.
If the earnings miss, the stock is likely to take a nosedive from the valuation of $52. This is true especially because the stock is trading at some of the highest levels.
Summary
The overall expectation is that Kroger will surprise the markets with higher earnings. When that happens, the stock will gain to prices between $62 and $65. This analysis recommends buying Kroger to lock in value ahead of earnings.
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