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Kroger Stock Confirms Buy Signal as Uptrend Gains Strength

Kroger’s (NYSE: KR) stock price entered an uptrend in early 2024 when it became clear it would emerge from the Albertsons merger talks a winner, regardless of how they turned out. Now, months later, the company is moving forward, growing, generating solid cash flows, and returning capital to shareholders like mad.

The takeaway is that these trends are expected to continue, and that is driving positive market sentiment. The net result is that Kroger’s uptrend is still intact and may even gain momentum in the back half of the year. 

Capital return is a significant factor in this market. The company ceased share repurchases to build capital in preparation for buying Albertsons and has since resumed them. The pace is aggressive, reducing the count by an average of 4.6% sequentially from Q4 F2025 and 8.6% on average compared to the prior year.

The pace is expected to continue robustly through the year’s end due to the accelerated share repurchase authorization and the $2.5 billion remaining under the standard authorization. Both are expected to be exhausted by the end of the year, and a new authorization is anticipated to be issued for the subsequent fiscal year. 

The technical signal is robust. The weekly chart shows a solid green candle, moving up from critical support levels to align with the existing uptrend. The daily chart shows the market moving significantly above the 30-day moving average while firing strong buy signals in the stochastic and MACD. The combined impact is a strong trend-following entry signal for a movement with the potential to reach new all-time highs by July and then continue trending higher through year’s end. 

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Kroger Issues Strong Q1 Report and Favorable Guidance for the Year

Kroger’s Q1 results are mixed at face value, with the top-line $45.12 billion down slightly compared to last year and below the analysts' consensus forecast. However, adjusted for divestitures, the company grew by 3.7% on a 3.2% comparable store gain excluding fuel.

The growth is an acceleration from the prior year, underpinned by digital. eCommerce, including same-day pickup, curbside, and delivery, grew by 15% and is expected to continue underpinning results for this retailer all year. 

The margin news is also good. The company produced better-than-expected margins at all levels, growing its bottom line despite the top-line contraction. The critical takeaway is that the adjusted $1.49 in earnings is up compared to the prior year and outpaced MarketBeat’s reported consensus, allowing management to issue strong guidance. The guidance is another crucial factor, forecasting modest comp-store gains and adequate free cash flow to sustain the capital return program. 

Kroger’s dividend should not be overlooked. Eventually, the accelerated buybacks will slow to a sustainable pace, leaving the dividend to drive investor sentiment. It is relatively high-yielding, delivering an annualized 1.95% in mid-June 2025, and is expected to grow annually. The company pays less than 30% of its earnings forecast and has increased for 19 consecutive years, setting it up for inclusion in the Dividend Aristocrats index early in the next decade. 

Yes, the Analysts’ Trends Support Uptrend in Kroger Stock Price

Kroger’s analyst trends are bullish for the market, including increasing coverage, firming sentiment, and a rising consensus target. The sentiment of 18 analysts is pegged at Moderate Buy near the end of Q2, a significant increase over the preceding 12 months, with a target price of $68. The $68 price target offered only 5% upside ahead of the release, but it is up nearly 25% YOY, and the revision trend was leading to the high-end range near $82, representing another 19% upside for investors. The institutional trends are likewise bullish. Institutions own more than 80% of the stock and have been buying it on balance in 2025. 

Written by Thomas Hughes

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