KR enters Thursday's Q1 earnings print with short interest freshly rebuilt, analyst targets drifting lower, and a stock that has barely moved in a month — a setup that is cautious without being alarming.
The short positioning story has not materially changed since the earlier note published today, but the data has held firm. Short interest remains at 4.5% of the free float — roughly 29.9 million shares — after jumping 18% in a single week from around 25 million through most of May. That rebuild is meaningful for a large-cap grocer. What it is not is a stressed borrow situation. Availability runs at nearly 1,800% of outstanding short interest, the loosest it has been in months and comfortably above the 52-week floor of 682%. Cost to borrow ticked up 11% on the week to 0.45% — still trivially cheap. Short sellers added exposure easily and inexpensively. Options confirm the lack of urgency: the put/call ratio of 0.75 is fractionally below its 20-day average of 0.76, essentially flat, with a z-score near zero. There is no options-driven defensive surge heading into the print.
The Street is quietly cautious rather than openly bearish. JP Morgan, the most recent mover, lowered its price target to $70 from $72 on June 11 while holding a Neutral rating — a modest trim, but directionally pointed in the wrong way with earnings two days out. The consensus mean target of $75.36 implies roughly 16% upside from the current $64.71, yet that figure is pulled higher by more optimistic houses. Earlier in March, a cluster of analysts lifted targets after the prior strong print, with Evercore and Telsey both nudging to the low $80s on Outperform ratings. That optimism has since eroded at the margin. The bull case centres on private-label momentum, digital investment, and the new CEO's operational track record. Bears point to Walmart's structural pricing pressure and the slow-burning shift toward online grocery — neither new concerns, but persistent ones. The EV/EBITDA multiple near 7.3x is undemanding. The P/E of 11.9x is similarly low, and both have drifted slightly lower over the past 30 days. Factor scores tell a similar mixed story: the forward EPS growth signal is strong — ranking in the 82nd percentile on 12-month forward EPS year-on-year increase — but the analyst recommendation differential scores in just the 9th percentile, flagging that the consensus skews more neutral than the headline target gap suggests.
Earnings history adds one more layer of context. The most recent print on June 2 produced a muted one-day reaction of -0.5%, followed by a five-day gain of 2.4%. The March 5 print was the outlier: a 9% jump on the day and 10% over the subsequent week. That was the beat that triggered the March analyst target-raising cycle. The question now is whether June 18 can replicate it — the short rebuild and JP Morgan's pre-emptive cut suggest the Street is not pricing in a repeat. ACI, the closest peer by correlation, fell nearly 6% on the week, while COST and BJ both edged higher. KR's 1.8% weekly gain sits somewhere in the middle of that peer range, neither leading nor lagging.
The setup heading into Thursday is one where the borrow market is relaxed and options traders are unmoved, but short sellers have quietly added conviction and the most recent analyst action has been a trim. Whether the June 18 print gives bears a reason to press further or forces another round of target upgrades is the single most important thing to watch.
See the live data behind this article on ORTEX.
Open KR on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
