Kroger Stock Rises After Pre-Earnings Bull Notes

Kroger will report earnings before the open on Thursday, March 3

Deputy Editor
Mar 1, 2022 at 10:02 AM
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Ahead of its fourth-quarter earnings report, grocery store stock Kroger Co (NYSE:KR) was upgraded to "outperform" from "market perform" by Telsey Advisory Group. The brokerage firm, which also raised its price target to $54 from $47, said it has "higher visibility and confidence into Kroger's multi-year omni-channel growth runway." In response, Kroger stock was last seen 2.8% higher to trade at $48.09.
 
Evercore ISI is also taking in interest in KR ahead of earnings, adding the equity to its "Tactical Outperform" list. There's plenty of room for a shift in sentiment, as 14 of the 16  brokerages covering the stock rated it a "hold" or worse, coming into today.
 
Kroger is slated to step into the earnings confessional ahead of the open on Thursday, March 3. The company has a history of mixed post-earnings reactions, moving higher in four out of eight next-day sessions over the past two years, including an 11% jump after its last report in December. In this time period, KR averaged a 5.2% next-day move, regardless of direction.
 
It's also worth noting that options traders have rarely shown such an interest in puts. KR’s Schaeffer’s put/call open interest ratio (SOIR) of 1.55 stands higher than 88% of readings from the past year, meaning short-term traders have rarely been more put-biased.
 
Today, however, calls are king, with 2,064 of these contracts exchanged so far, which is double the intraday average. The most popular position is the weekly 3/4 50-strike call, followed by the 48-strike call in the same series.
 
On the charts, Kroger stock is trading higher once again, after pulling back significantly from its Jan. 13 record high of $50.15. The security found its footing near long-term support at the 150-day moving average, and is pacing for its  third-straight win, and highest close since mid-January. Year-over-year, KR is up 45.7%.
 

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