BUZZ-Kroger down as BMO downgrades to 'market perform'

Reuters2024-12-03

(Updates)

** Food retailer Kroger's shares fall as much as 1.3% to $59.38

** Brokerage BMO Capital Markets downgrades stock to "market perform" from "outperform", while Jefferies upgrades it to "buy" from "hold"; co set to report Q3 results on Dec. 5

** Bearish BMO sees co reiterating FY EPS targets; believes stock valuation expansion requires stronger grocery market share and upward EPS revisions

** Notes stock reflects potential EPS accretion from $25 bln-merger deal with rival grocer Albertsons or no-deal scenario

** Bullish Jefferies notes improved October foot traffic and a more profitable fuel business; raises PT to $73 from $54

** Says if the merger with Albertsons falls out, debt raised can enable share buybacks, driving EPS,

** Also says if deal works, KR could realize synergies to face competition better

** U.S. Federal Trade Commission argued to stop merger, citing possible surge in grocery prices in August

** Eleven of 23 brokerages rate the stock "buy" or higher, and 12 "hold"; with a median PT of $59

** Up to Monday's close, stock has risen ~32% YTD

(Reporting by Neil J Kanatt in Bengaluru)

((Neil.JKanatt@thomsonreuters.com;))

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