Cantor Fitzgerald

Cantor Fitzgerald Comments: Kroger Gets A Downgrade

March 6, 2012, TheStreet.com

Shares of food retailer Kroger(KR) were downgraded to at TheStreet Ratings on Monday.

Kroger reported on March 1 a fourth-quarter loss of $306. 9 million, or 54 cents a share, a swing from year-earlier earnings of $278.8 million, or 44 cents a share.

"We expect the stock to remain range-bound at this time," Cantor Fitzgerald analysts wrote in a March 2 report. "Investors should be very pleased with general business trends at KR, but we are starting to see some growing disconnect between reported EPS and the underlying profitability."

Kroger has an estimated price-to-earnings ratio for next year of 9.63 times; the average for food retailers and wholesalers is 33.58. For comparison, both Whole Foods Market(WFM) and Safeway(SWY) have higher forward P/Es of 30.86 and 10.94, respectively.

Twelve of the 21 analysts who cover Kroger rated it buy. Six analysts gave the stock a hold rating and three rated it sell.

TheStreet Ratings gives Kroger a C+ grade. The stock closed Friday at $24.08 and has dropped less than 1% year to date.