Kroger Stock Chases Record Highs After Bull Note

KR's options can be had for a bargain at the moment

Deputy Editor
Apr 8, 2022 at 9:45 AM
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Grocery store giant and Cincinnati staple Kroger Co (NYSE:KR) was upgraded to "buy" from "neutral" by Bank of America Securities this morning. In response, KR was last seen  up 2.9% to trade at $61.62, and earlier scoring a record high of $62.78 out of the gate. The brokerage firm, which also raised its price target to $75 from $61, noted that grocery inflation should continue to act as a tailwind for the shares.
 
Earlier this month, we profiled Kroger and how its torrid price action helped Schaeffer's Weekend Trader subscribers triple their money. Year-to-date, KR is up 32.3%, with chart support in place at its ascending 20-day moving average, which contained pullbacks in late March.
 
Circling back to analyst sentiment, Telsey Advisory Group also dished out a bull note to Kroger yesterday, lifting its price objective to $84 from $82. There's ample room for covering brokerages to jump on board the bullish bandwagon, as 14 of the 17 brokerages covering KR recommended a "hold" or worse, versus just three "strong buy" ratings, coming into today. 
 
For those looking to speculate on KR's next move with options, now could be the ideal time. The security's Schaeffer's Volatility Index (SVI) of 30% sits in the relatively low 28th percentile of its 12-month range. In other words, options traders are pricing in relatively low volatility expectations right now. What's more, Kroger stock boasts a Schaeffer's Volatility Scorecard (SVS) of 86 (out of a possible 100), implying the shares have tended to outperform said volatility expectations of late.
 
 

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