Kroger Stock Needs a Post-Earnings Bounce

The stock has been falling since early April

Deputy Editor
Jun 17, 2024 at 1:43 PM
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Cincinnati-based Kroger Co (NYSE:KR) will announce its first-quarter report before the open Thursday, June 20. Telsey Advisory Group reiterated its "outperform" rating ahead of the event, though the firm anticipates slightly lower-than-expected earnings per share of $1.30 compared to Wall Street's estimates of $1.34. 

It's worth noting that Kroger stock finished its last three post-earnings sessions higher, including a 9.9% pop in March. The stock has been slipping since its April 3 two-year peak of $58.33. However, the shares are up 1.2% at $50.96 at last glance today, holding on to an 11.6% year-to-date lead. Plus, the $50 level, which rejected the shares numerous times over the past couple years, could provide support alongside the 160-day moving average. 

KR June17

Over the past two years, the stock has averaged a post-earnings swing of 4.3%, regardless of direction. This time around, the options pits are pricing in a larger move of 7.2%.

Should the stock sway positive, its price action could benefit from its "oversold" status. This is per KR's 14-day relative strength index (RSI) of 24.3, which sits firmly in "oversold" territory. 

Meanwhile, options traders are chiming in ahead of the results, with 11,000 calls and 9,610 puts exchanged so far -- already 2.4 times the overall average daily options volume. The June 50 put is the most popular, with new positions opening at the October 50 put. 

 

 

 

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