Customer Data, Advantaged Store Locations, and Scale Should Lift Kroger Despite Competition
We plan a high-single-digit percentage cut to our $31 fair value estimate for narrow-moat Kroger in the wake of the company's fourth-quarter earnings and underwhelming guidance announcement. While we still believe the firm's transformation effort will stabilize performance, the results validate our skepticism regarding management's plans to boost FIFO operating profit by $400 million from fiscal 2017 to 2020 (to $3.5 billion). Our long-term forecast, for low-single-digit top-line growth and fair...Kroger operates as a retailer. The company also manufacture and process some of the food for sale in its supermarkets. Supermarkets are operated under one of the following formats: combination food and drug stores (combo stores); multi-department stores; marketplace stores; or price impact warehouses. The combo stores provide food and organic sections, pharmacies, general merchandise, pet centers and perishables such as seafood and organic produce. Marketplace provide grocery, pharmacy and health and beauty care departments as well as perishable offering and general merchandise area that includes apparel, home goods and toys.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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