Despite headwinds, especially going into Q2 earnings, Credit Suisse remains bullish on Kroger (KR):
Managing Kroger’s quarterly volatility has always been a challenge for investors. This trend should continue into [FY 2009] given the company’s recent investments in price, rising fuel costs, and uneven comparisons. We believe the first quarter will be robust and like the stock into earnings. The second quarter may prove to be more challenging, as aggressive price investments exacerbate an already difficult comparison. We remain confident in Kroger’s outlook and would view any weakness as a buying opportunity.
Credit Suisse reiterates OUTPERFORM, target price $32.
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