Kroger's Closure of CFCs: Kroger, Ocado's key partner, announced the closure of three customer fulfillment centers, indicating that demand for automated grocery deliveries is limited to densely populated areas, which may reduce Ocado's market potential.
Financial Impact on Ocado: The closures will result in a manageable financial hit for Ocado, with analysts estimating a $50 million revenue loss next year, but a $250 million compensation payment will help mitigate the impact.
Future of the Partnership: Despite the setbacks, Ocado remains in "constructive ongoing discussions" with Kroger regarding the use of its technology, suggesting that the partnership is not entirely over.
Market Valuation Changes: Following Kroger's announcement, Ocado's share price dropped by 17%, leading to a market valuation of approximately £2.5 billion, which reflects a significant decrease from its previous tech-style multiples.
Wall Street analysts forecast KR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KR is 75.00 USD with a low forecast of 68.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
Wall Street analysts forecast KR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KR is 75.00 USD with a low forecast of 68.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Buy
6 Hold
0 Sell
Moderate Buy
Current: 62.650
Low
68.00
Averages
75.00
High
85.00
Current: 62.650
Low
68.00
Averages
75.00
High
85.00
Deutsche Bank
NULL -> Buy
resume
$75
2026-01-08
Reason
Deutsche Bank
Price Target
$75
AI Analysis
2026-01-08
resume
NULL -> Buy
Reason
Deutsche Bank resumed coverage of Kroger with a Buy rating and $75 price target. The firm resumed coverage of the broadlines and food retailers. Deutsche expects 2026 to be another "mixed year," characterized by food disinflation, reduced government benefits, and consumers' value focus extending into the new year. The analyst says that while defensive sectors such as food retail could face a challenging setup, "there are tailwinds on the horizon," including a sizable stimulus in the first half of 2026.
Barclays
Equal Weight
downgrade
$75 -> $68
2026-01-08
Reason
Barclays
Price Target
$75 -> $68
2026-01-08
downgrade
Equal Weight
Reason
Barclays lowered the firm's price target on Kroger to $68 from $75 and keeps an Equal Weight rating on the shares. The firm is positive on the broadlines, hardlines and food retail sector entering 2026. It sees improvements in discretionary goods demand with potential for a "modest bump" from consumer tax savings ahead and interest rate cuts.
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Citi
Paul Lejuez
Neutral
downgrade
$74 -> $68
2025-12-10
Reason
Citi
Paul Lejuez
Price Target
$74 -> $68
2025-12-10
downgrade
Neutral
Reason
Citi analyst Paul Lejuez lowered the firm's price target on Kroger to $68 from $74 and keeps a Neutral rating on the shares.
Morgan Stanley
Equal Weight
maintain
$76 -> $72
2025-12-08
Reason
Morgan Stanley
Price Target
$76 -> $72
2025-12-08
maintain
Equal Weight
Reason
Morgan Stanley lowered the firm's price target on Kroger to $72 from $76 and keeps an Equal Weight rating on the shares. While underlying trends are "largely stable ex-macro," the bull case for a top-line acceleration is "getting pushed out," the analyst tells investors in a post-earnings note.
About KR
The Kroger Co. is a food and drug retailer. The Company operates supermarkets, multi-department stores and fulfillment centers throughout the United States. It operates approximately 2,731 supermarkets, 2,273 pharmacies and 1,702 fuel centers in over 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale in its supermarkets and online. It offers Pickup and Harris Teeter ExpressLane personalized, order online, pick-up at the store services at approximately 2,412 of its supermarkets and provides delivery, which allows it to offer digital solutions to substantially all of its customers. Its delivery solutions include orders delivered to customers at retail store locations, customer fulfillment centers and orders placed through third-party platforms. The Company also offers customer-facing apps and interfaces.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
