Kroger, the nation's largest pure-play grocer, is doing surprisingly well considering the intense competition from Walmart, Amazon, Costco and smaller supermarket chains. On Thursday, the Relative Strength (RS) Rating for Kroger stock jumped to 85, up from 80 the day before.
Kroger stock rose to the highest price in more than two years early this month amid accelerating earnings growth. The 85 RS Rating shows that Kroger outperformed 85% of all stocks over the past year. It's a notable accomplishment because research shows that stocks that go on to make the biggest gains typically have an 80 or better RS Rating as they launch their biggest climbs.
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Kroger Stock Rise Reflects Improving Sales, Profits
In terms of fundamentals, Kroger has posted rising EPS growth over the last three quarters. Top line growth has also increased over the same time frame. Last quarter the Cincinnati-based company reported a 15% increase in earnings to $1.14 per share on a 6% rise in revenue to $37.1 billion.
Over the past four quarters its EPS growth rate has risen from 4% to 7%, 8% then 15%. Look for that trend to continue. The 6% rise in sales was a turnaround after revenue fell 2%, then 1% on a year-over-year basis the prior two stanzas. See if it can continue that trend as well.
Among its other key ratings Kroger has an outstanding 92 Earnings Per Share Rating out of 99, reflecting rising recent strength and long-term stability. Its overall Composite Rating is also 92.
Additionally, Kroger stock has a bullish B+ Accumulation/Distribution Rating on an A+ to E scale, with A+ best. The B+ rating shows strong buying by institutions such as university funds and mutual funds.
Look For Fresh Entry
Kroger stock has climbed more than 5% past a 47.75 entry in a first-stage cup with handle, meaning it's now out of a proper buy zone. Look for the stock to create a new chance to get in like a three-weeks tight or pullback to the 50-day or 10-week moving average.
Kroger stock earns the No. 1 rank among its peers in the 13-stock Retail-Super/Mini Markets industry group. Sprouts Farmers Market and Natural Grocers are also among the group's highest-rated stocks.
The unique IBD Relative Strength Rating measures market leadership by using a 1 (worst) to 99 (best) score that identifies how a stock's price action over the last 52 weeks matches up against the rest of the market.
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
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