KR
Kroger Company (The)Consumer Defensive / Grocery StoresINTACTThe Kroger Co. operates as a food and drug retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and its multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company's marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and its price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through its fuel centers. The company sells its products through its stores, fuel centers, and online platforms. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.
Price vs. Intrinsic Value Corridor
Overvalued vs DCF ($58.09)Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.
2-Stage Discounted Cash Flow (DCF) Workbench
Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.
| Year | Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 | Yr 6 | Yr 7 | Yr 8 | Yr 9 | Yr 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Projected FCF ($M) | $3,154 | $3,321 | $3,497 | $3,682 | $3,877 | $4,052 | $4,234 | $4,425 | $4,624 | $4,832 |
| Present Value (PV) | $2,893 | $2,795 | $2,700 | $2,609 | $2,520 | $2,416 | $2,316 | $2,221 | $2,129 | $2,041 |
Benjamin Graham & Buffett Value Models
Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.
Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.
Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.
True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.
Reverse DCF: Market Growth Expectation
EXTREMELY LOW BARRIERAt the current price of $58.56, the market is assuming the business will compound Free Cash Flow at -1.2% per year for the next decade with a 9% hurdle rate.
Surveil KR with Mathematical Margin of Safety Rules
Set non-negotiable floor rules for Kroger Company (The). If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.
ROIC > 15% • Margin > 15% • D/E < 0.5x
Current Margin 3.2% • Floor > 10%
Altman-Z > 2.6 • Current Ratio > 1.5x
Frequently Asked Questions: Kroger Company (The) (KR) Intrinsic Valuation
Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Kroger Company (The).
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