Kroger Co. (NYSE:KR) Stock Upgrade and Financial Performance Review

Font: Financial Modeling Prep  • Mar 06, 2026

• Jefferies upgraded Kroger Co. (NYSE:KR) to a "Buy" rating with a new price target of $82 following impressive Q4 2025 results.
• Kroger reported an adjusted profit of $1.28 per share, beating earnings expectations, with a significant 50% increase in GAAP earnings per share to $1.35.
• The company's e-commerce sales surged by 20%, and its free cash flow nearly doubled to $3.4 billion, showcasing strong cash generation capabilities.

Kroger Co. (NYSE:KR) is a leading American retail company, operating supermarkets and multi-department stores across the United States. Known for its wide range of grocery products, Kroger also offers pharmacy services and has a growing e-commerce presence. The company competes with other major retailers like Walmart and Costco in the highly competitive grocery market.

On March 5, 2026, Jefferies upgraded Kroger's stock to a "Buy" rating, setting a new price target of $82. At the time, the stock was priced at $71.57. This upgrade followed Kroger's impressive fourth-quarter results for 2025, which saw the stock rise by 4.8%. The company exceeded earnings expectations with an adjusted profit of $1.28 per share, surpassing the anticipated $1.20.

Despite the earnings beat, Kroger's sales slightly missed forecasts, reporting $34.7 billion against the expected $35 billion. However, same-store sales, excluding fuel, grew by 2.4%, indicating strong performance in core operations. The company's operating profit surged by 36.6%, and GAAP earnings per share increased by 50% to $1.35, highlighting robust financial health.

Kroger's full-year results showed total sales of $147.6 billion, a modest 0.3% increase from 2024. The company faced challenges from declining fuel costs, which impacted overall sales figures. Nevertheless, same-store sales, excluding fuel, rose by 2.9% for the year. Kroger's free cash flow nearly doubled to $3.4 billion, reflecting strong cash generation capabilities.

The company's gross margin expanded to 23.1%, driven by effective cost management strategies, including sourcing gains and reduced supply-chain costs. Kroger's e-commerce sales saw a significant 20% increase, contributing to the overall positive performance. The stock's recent price movement, with a 5.27% rise to $71.57, reflects investor confidence in Kroger's growth prospects.