KRNYSE·Grocery Stores

The Kroger Co. KR

Market cap $36.3BP/E 33.8× trailingGross margin 23.2%

$59.33

+1.69 (+2.93%)live 09:35 ET

52-wk $54.15 – $76.58

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Orin's take

0.62conviction · moderate

Refreshed 2 Sep · take v5. A new filing or a print queues the next refresh.

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Kroger remains a hold as the investment case is still bifurcated: FY2025 operating margin collapsed to 1.28% with EPS down 58% to $1.54, yet Q1 FY2026 showed recovery with $1.4B operating income and EPS of $1.46 on 2.2% revenue growth. The stock trades at 33.5x trailing P/E — a 52% premium to the 21.96 peer median — but the 10.5x EV/EBITDA (23% discount to peers) and 0.24x P/S reflect the market's discounted view of grocery economics.

With the stock at $57.94, roughly 10% below its 200-day MA of $64.17 and just above the 50-day at $57.66, and management guiding only flat-to-modest FY2026 growth, there is no urgency to act until margin recovery is sustained across multiple quarters.

What could go wrong

Margin compression persists. FY2025 operating margin of 1.28% is down sharply from 2.62% in FY2024, and Q3 FY2025 produced a $1.54B operating loss; if margins do not recover, the elevated P/E becomes harder to justify.
High leverage. Total debt of $24.7B against equity of just $5.9B leaves a thin cushion if operating performance deteriorates further or if acquisition integration costs escalate.
Smart money outflow. Smart money score has deteriorated from 0.0229 as of 2025-09-30 to -0.0074 as of 2026-06-30, suggesting institutional positioning is turning slightly negative.
Revenue stagnation. FY2025 revenue growth was just 0.35% YoY and management forecasts only flat-to-modest identical sales growth for FY2026, limiting the top-line lever.

What would change my mind

Sustained margin recovery. Two consecutive quarters with operating margin above 2.5% and EPS beatsbullish

Deleveraging progress. Total debt declines below $22B or debt-to-equity improves meaningfullybullish

Another loss quarter. Any quarter with negative operating income or a significant EPS missbearish

Stock breaks below $54. Price closes below $54 on heavy volume, breaking technical supportbearish

Where this comes from: derived_metrics FY2025 + fundamentals FY2025 · quarterly_results Q1 FY2026 · peer_relative · technicals as of 2026-09-01. Orin's read on KR; not advice.

Twelve months actual closes to 2026-09-23 · actual filings

Sept 25Nov 25Jan 26Mar 26May 26Jul 26

50-day average 200-day average · volume below

On file

All KR filings

Form	Filed	What it says	Read
10-Q	18 Sep	—	on file
8-K	2 Sep	Kroger appointed Mark Ibbotson as Executive Vice President and Chief Store Operations Officer, effective September 14, 2026.	read
8-K	1 Jul	Kroger Co. entered into an agreement to acquire Giant Eagle, Inc. for approximately $1.65 billion, comprising $1.25 billion in cash and $400 million in assumed liabilities. The…	read
8-K	26 Jun	Ronald L. Sargent will transition from Chairman of the Board to Non-Executive Chairman of the Board, effective July 1, 2026, ceasing his employee role. He will receive standard…	read
10-Q	26 Jun	Kroger reported Q1 2026 diluted EPS of $1.46, up 13.2% year-over-year from $1.29.	read
8-K	18 Jun	Kroger Co. announced its first quarter 2026 results on June 18, 2026. The filing triggered Item 2.02 Results of Operations and Financial Condition and Item 9.01 Financial…	read
8-K	27 May	Timothy A. Massa, Executive Vice President and Associate Experience Officer, will retire in fall 2026, continuing in his role until September 2026 and remaining an employee…	read
DEFA14A	13 May	—	on file

Largest holders · 13F Q2 2026

Money flow

Filer	Position	Of fund
Berkshire Hathaway	$2.2B	0.7% of fund
Vanguard Capital Management	$2.0B	0.0% of fund
Vanguard Portfolio Management	$1.7B	0.1% of fund
State Street	$1.6B	0.0% of fund
Wellington Management Group Llp	$939.6M	0.2% of fund
Fmr	$922.0M	0.0% of fund

101 filers · quarter ended Q2 2026 · positions, not flows

Insiders, last 24 months: 203 Form 4 filings, net −$8.5M. Of the 50 on hand, 0 were open-market purchases and 1 a sale— the rest are grants, option exercises and tax withholding.

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Where it trades

vs its own 5y · Consumer Defensive

Metric	Now	Own median	Sector
P/E	33.8×	16.5×	38.3×
EV/EBITDA	10.6×	8.4×	—
P/S	0.24×	0.23×	—
P/B	5.5×	3.4×	—

Its P/E sits 80th percentile of its own last 5 years (+1.30σ from its own mean).

What the price assumes

-0.9%

free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $3.4B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.

What Wall Street published

44 firms · 2026-09-03

Consensus target

$72

$58 – $82 · +21% against today's price

How they rate it

21 buy or overweight
17 hold
6 underweight or sell

The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.

Against the companies it is compared to

median P/E 21.9× of 6 peers

Company	Market cap	P/E	EV/EBITDA	Gross	Net	ROE
KRThe Kroger Co.	$36B	33.8×	10.6×	23.2%	0.7%	15%
HSYThe Hershey Company	$36B	23.7×	15.4×	38.1%	12.2%	32%
KDPKeurig Dr Pepper Inc.	$45B	33.1×	21.4×	49.4%	7.1%	6%
KMBKimberly-Clark Corporation	$36B	18.4×	13.6×	36.7%	11.8%	123%
KVUEKenvue Inc.	$36B	21.8×	13.8×	58.2%	10.8%	16%
SYYSysco Corporation	$39B	22.1×	13.6×	18.5%	2.1%	75%
TGTTarget Corporation	$74B	16.9×	10.4×	29.3%	4.1%	27%

The median is of the 6 peers listed above and nothing else — check it against the column. This company trades 54.2% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.

What it has traded at

P/E by fiscal year

FY15 19.7×FY26 40.3×

What its sector has traded at

Consumer Defensive

FY14 22.9×FY26 39.1×

Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.

Discounted cash flow

not recomputed since

Model	Fair value	Against	Computed
Standard DCF	$86	$64.07 · +34%	2026-06-10
Levered DCF	$125	$64.07 · +95%	2026-06-10

The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.

Every estimate on one scale

price $59.33

52-week range$54 – $77

Analyst targets$58 – $82

Standard DCF$86 as of 2026-06-10, when it was $64.07

Levered DCF$125 as of 2026-06-10, when it was $64.07

At own 5y-median P/E (17×)$29

At 5y P/E range (14–40×)$25 – $70

At sector P/E (38×)$66

The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.