Valued at a market cap of $39.8 billion, The Kroger Co. (KR) is a food and drug retailer based in Cincinnati, Ohio. It operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. 

This food retailer has lagged behind the broader market over the past 52 weeks. Shares of KR have gained 3% over this time frame, while the broader S&P 500 Index ($SPX) has surged 14.3%. Moreover, on a YTD basis, the stock is up marginally, compared to SPX’s 1.4% return.

Narrowing the focus, KR has also underperformed the State Street SPDR S&P Retail ETF (XRT), which gained 5.7% over the past 52 weeks and 1.2% on a YTD basis. 

KR is expanding its Simple Truth Protein portfolio with the launch of 24 new products in the month of January, bringing the total lineup to more than 110 offerings. The expanded range is designed to meet a broad set of nutrition needs, from consumers looking to establish consistent, everyday protein intake to those aiming to support strength-building and active lifestyles.

On the other hand, shares of KR tumbled 4.6% on Dec. 4 after it delivered its mixed Q3 results. On a positive note, the company’s adjusted EPS climbed 7.1% year-over-year to $1.05, surpassing consensus estimates by a penny. However, on the downside, its revenue of $33.9 billion, which grew marginally from the year-ago quarter, missed analyst expectations by 1.3%, weighing on investor sentiment.  

For the current fiscal year, ending in January, analysts expect KR’s EPS to grow 7.2% year over year to $4.79. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters. 

Among the 22 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on 12 “Strong Buy,” and 10 “Hold” ratings.  

The configuration is more bullish than a month ago, with 11 analysts suggesting a "Strong Buy” rating. 

On Jan. 15, Morgan Stanley (MS) maintained an "Equal Weight" rating on KR but lowered its price target to $67, indicating a 6.6% potential upside from the current price levels. 

The mean price target of $74.81 represents a 19% premium from KR’s current price levels, while the Street-high price target of $85 suggests a 35.2% potential upside from the current levels. 

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