Bank of America selected Kroger (NYSE:KR) as one of its top ten U.S. stock ideas for Q3.
A potential catalyst seen for Kroger (KR) is that elevated food inflation should continue and higher grocery prices are being passed on to consumers. Kroger's (KR) market trends are also noted to be improving.
"We highlight KR as our Top Pick as we see support for meaningful EPS upside to continue (see strong F1Q earnings – expect beat & raise pattern to continue) in a highly inflationary environment. KR trades at just ~12x F24E P/E vs. our $75 PO that assumes 18x, & reflects potential for further upward EPS revisions as high inflation supports ID sales upside."
Bank of America has a Buy rating on Kroger (KR).
Read why the Seeking Alpha Pro Editors called Kroger a defensive play with 25% upside.