Kroger (KR): Evaluating the Stock’s Value After Expanding Its DoorDash Delivery Partnership

Kroger is pushing further into online grocery delivery by expanding its partnership with DoorDash. This will offer customers access to its full product lineup. This strategic move highlights Kroger’s focus on digital growth and reaching more shoppers.

See our latest analysis for Kroger.

The DoorDash partnership comes on the heels of a busy stretch for Kroger, including a recent recall affecting deli salads and an anniversary campaign for its Private Selection line. Despite these headlines, momentum is still building. Kroger’s one-year total shareholder return of nearly 25% outpaces its more modest year-to-date share price gain, and the stock’s impressive 67% three-year total return underscores long-term value.

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With Kroger’s shares trading below many analyst estimates and a projected fair value well above current levels, the question for investors is clear: Is Kroger stock still undervalued, or has the market already priced in its future growth?

Most Popular Narrative: 10.5% Undervalued

At $67.78, Kroger’s share price sits well below the fair value calculated in the most widely followed narrative. This suggests the market may be missing key upside drivers right now.

Kroger's continued focus on fresh and health-oriented offerings, including expansion of its Simple Truth and Private Selection lines (with 80 new protein products targeting current consumer trends), positions it to benefit from heightened consumer emphasis on health and premiumization. This approach may support larger basket sizes, higher gross margins, and improved earnings quality over time.

Read the complete narrative.

Want to know the surprisingly bold assumptions powering this valuation? The real secrets lie in the future shift of profit margins and a striking outlook on earnings growth. What’s behind the analyst consensus? Only the full narrative breaks down the numbers.

Result: Fair Value of $75.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent wage inflation and ongoing losses in e-commerce could limit Kroger’s upside, particularly if digital initiatives take longer to become profitable.

Find out about the key risks to this Kroger narrative.

Build Your Own Kroger Narrative

If this perspective doesn’t match yours or you’d rather investigate on your own, crafting a personalized view takes just a few minutes. Do it your way

A great starting point for your Kroger research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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