Kroger Co. (KR) operates retail food and drug stores, multi-department stores, jewelry stores, and convenience stores throughout the United States. The stock is currently trading around $73.01 at the upper end of its 52 week range of $46.77-$77.74. The stock has been outperforming the market this year rallying 13.49% year to date. KR is scheduled to report earnings before the opening bell tomorrow, and the stock is higher on the session by around $0.67 or 0.93% ahead of the close.

Over the past 12 quarters KR has rallied on earnings day 8 times with an average move of 3.60%. The stock appears bearish on chart going into the release having broken through the Ichimoku Cloud in the past week. Over the past 12 quarters KR has rallied from earnings to the nearest options expiration 10 times with an average move of 5.48%. The stock looks as if it could continue its trend and rip to the upside further in today’s session. Investors are seeing favorable earnings estimate revisions as of late which is typically a precursor for strong earnings. Other than the revisions, due to warmer weather investors expect revenue to increase due to a greater number of consumers visiting stores operated by Kroger Co. and spending money.

The options market is currently implying a move of around $2.80 or 3.80% in KR by this Friday’s close giving us targets of $75.75 and $70.15.

Andrew Keene


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