Why Is Kroger Stock Up Over 1% Premarket?

After strong results last week, Roth Capital upgraded the stock to ‘Buy.’

Roth Capital bumped up its rating on Kroger shares to 'Buy' and raised its price target, sending the stock up more than 1% in premarket trading on Wednesday.

The investment research firm raised its price target on the stock to $75 from $66, according to the investor note summary posted on The Fly, implying an over 12% upside from the last close.

The analyst upgrade comes days after the supermarket chain raised its annual core sales and adjusted profit forecast last week. At a time when peers, such as Walmart and Dollar General, have raised product prices to accommodate higher costs due to tariffs, Kroger is lowering them.

The company lowered prices on some 3,500 items sold in its stores, it stated last Thursday, with the management indicating that "lower prices and simpler promotions" are helping it draw consumers.

Roth Capital noted momentum in Kroger's business even as the stock lags its peers.

Although Kroger shares gained over 8% after the company's earnings on Thursday, they are up just 10.3% year-to-date. That' is below the 14.5% rise in Walmart's shares and 12.3% gains in the benchmark S&P 500 index.

On Stocktwits, the retail sentiment for Kroger, however, shifted lower to 'bullish' from 'extremely bullish' the previous day.

Kroger is currently fighting a legal battle with Albertsons after their $25-billion proposed merger collapsed in December last year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<