Options Bulls Blast Kroger Stock on Quarterly Win

Kroger says demand remains strong despite inflation

Digital Content Manager
Dec 1, 2022 at 11:16 AM
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Kroger Co (NYSE:KR) announced third-quarter earnings of 88 cents per share earlier -- better than analysts' expectations of 82 cents per share -- and a revenue beat of $33.96 billion. What's more, the grocery concern hiked its annual same-store sales forecast, as demand remains strong despite high inflation. Nevertheless, KR is down 1.3% at $48.53.

Options traders are already chiming in, with overall options volume running at five times what is typically seen at this point. So far, 16,000 calls and 7,042 puts have been traded, with the 12/2 51-strike call -- where new positions are being opened -- standing out as the most active contract.

Looking back further, the stock's Schaeffer's put/call open interest ratio (SOIR) sits in the low 12th percentile of annual readings, suggesting short-term options traders have been more call-biased than usual. 

The brokerage bunch is skeptical, however, leaving plenty of room for upgrades. In fact, 13 of 18 analysts in question sport a tepid "hold" or worse rating, while the remaining five say "strong buy."

On the charts, Kroger stock earlier surged to its highest level since Sept. 13. The 320-day moving average has been providing a floor for the shares since mid-November, and longer term, KR sports a healthy 20.5% year-over-year lead.


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