Analyst Note
| Zain Akbari, CFA |Our $47.50 per share valuation of narrow-moat Kroger should not change much after it announced first-quarter earnings (including 4% identical sales growth, excluding fuel; period ended May 21) that leave it poised to meet our full-year targets. We believe Kroger’s private label prowess and omnichannel strength should serve it well in an unsettled economic environment and still expect low-single-digit revenue growth and adjusted operating margins on average over the next decade. We suggest prospective investors seek a greater margin of safety before building a position.