Kroger (KR:NYS) Fundamental Valuation Report

Kroger (KR:NYS) Fundamental Valuation Report

Fundamental Valuation Report


Consumer Defensive:Grocery Stores

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$36.89 (USD) 04/06/2021

Weighted Valuation
$37.20 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 0.8%

Valuation Models Adjusted Book Value: $44.99 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation
According to Analyst consensus at $37.20 this stock is Fairly valued

Company Overview (KR:NYS USD)

Price 36.89
Range 36.45 – 37.15
52 week 30.58 – 38.75
Open 36.64
Vol / Avg. 12.75M/10.4M
Mkt cap 27.03B
P/E 10.99
Div/yield 0.68/0.02
EPS 3.27
Shares 751.99M
Beta 0.36

Company Description

Kroger is the leading American grocer, with 2,757 supermarkets operating under several banners throughout the country as of the end of fiscal 2019. Around 82% of stores have pharmacies, while over half also sell fuel. The company also operated more than 300 fine jewelry stores at the end of fiscal 2019. Kroger features a leading private-label offering and manufactures around a third of its own-brand units (and 42% of its grocery own-label assortment) itself, in 35 food production plants nationwide. Kroger is a top-two grocer in 90% of its major markets (as of late 2019, according to Planet Retail and Edge Retail Insight data cited by the company). Virtually all of Kroger’s sales come from the United States.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for KR:NYS

Using a discounted cash flow model we generated an intrinsic value of $92.95 (USD) for KR:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

KR:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $92.95 1% 5% 1% 5%
WACC (or Ke) 3.29 $142.62 $66.51
Terminal Growth Rate 0.00 $68.25 $139.23
Tax Rate 0.23 $100.81 $85.10
Cash Flow 6,566,400,000 $82.80 $103.11
Capital Expenditures -3,093,600,000 $88.41 $97.50
Long Term Debt 12,420,000,000 $93.78 $92.13

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $49.15 (USD) for KR:NYS. We also generated a valuation of $37.70 (USD) using other metrics and comparables.
The comparable companies were Casey’s General Stores (CASY:NAS) and Albertsons Companies (ACI:NYS).

Company KR:NYS End Date Value
Earnings/Share $3.27 (USD)
Book Value/Share $12.73 (USD)
Sales/Share $169.65 (USD)
Cash Flow/Share $8.73 (USD)
EBITDA/Share $9.33 (USD)
Price Based on Comps Adjustment Factor (%)
$57.95 (USD) -45.5
$67.44 (USD) 28.5
$108.77 (USD) -53.5
$31.14 (USD) -34.3
$80.97 (USD) -28.2
KR:NYS Ratios Used Average Values CASY:NAS ACI:NYS
11.28 PE Ratio 17.72 24.47 10.98
2.90 PB Ratio 5.30 4.27 6.32
0.22 PS Ratio 0.64 1.15 0.13
4.23 PCF Ratio 6.59 10.64 2.54
6.25 EV to EBITDA 8.68 12.22 5.14


Using a multiples approach we generated a valuation of  $46.04 (USD) for KR:NYS

Company KR:NYS End Date Value
Earnings/Share $3.27 (USD)
Book Value/Share $12.73 (USD)
Sales/Share $169.65 (USD)
Cash Flow/Share $8.73 (USD)
EBITDA/Share $9.33 (USD)
Price Based on Comps Adjustment Factor
$42.06 (USD) 0
$39.43 (USD) 0
$34.54 (USD) 0
$49.12 (USD) 0
$65.05 (USD) 0
Ratios Ratio Average
PE Ratio 12.86
PB Ratio 3.10
PS Ratio 0.20
PCF Ratio 5.63
EV to EBITDA 6.97

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  KR:NYS for the last 10 years was  3.56

We ran the Adjusted Book Value for  KR:NYS and generated a book value of  $12.63 (USD)
By multiplying these we get an adjusted valuation of  $44.99 (USD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for KR:NYS. The 5 analysts have a concensus valuation for KR:NYS for 2022 of $37.20 (USD).

KR:NYS Kroger

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 4 0 3.8571 Outperform 2021-4-5

Current Price: 36.89 USD

Analyst Consensus
USD Millions 2022 2023 2024
Mean EPS 2.78 2.96 3.20
# EPS Analysts 5 3 1
Mean Revenue 129,375.70 133,183.70 137,769.40
# Revenue Analysts 4 2 1
Mean Target Price 37.20
Mean Cash Flow 5.73 7.09 7.48
Mean EBITDA 6,106.20 6,342.60 6,566.40
Mean Net Income 2,073.70 2,211.00 2,290.20
Mean Debt Outstanding 10,640.10 9,660.40 9,324.60
Mean Tax Rate 23.00 23.00
Mean Growth Rate 5.95
Mean Capital Expenditure 3,379.30 3,629.40 3,730.40

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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