Kroger (KR): Evaluating Valuation as New eCommerce Strategy Targets $400M Profit Boost by 2026

Kroger (KR) is making bold changes to its eCommerce operations and is aiming for a $400 million profit boost by 2026. The company plans to close certain automated fulfillment centers and expand collaborations with Instacart, DoorDash, and Uber Eats.

See our latest analysis for Kroger.

After a steady climb for much of the year, Kroger’s latest eCommerce overhaul arrives as the stock trades at $65.9. Investors have seen a 6.4% share price return so far in 2025 and a 14.8% total shareholder return over the past year, supported by ongoing store performance and growth in grocery delivery. With momentum holding firm, these changes signal confidence in both near-term profitability and Kroger’s ability to adapt for the long haul.

If Kroger’s transformation has you curious about where else value and growth might converge, now is a great time to explore fast growing stocks with high insider ownership.

The stock’s recent rally and a discounted price compared to analyst targets raise a key question for investors: Is Kroger still undervalued amid its transformation, or is the market already anticipating future growth?

Most Popular Narrative: 13% Undervalued

Simply Wall St’s most-followed narrative places Kroger’s fair value at $75.73, which is around $10 higher than the latest closing price. This perspective sets a bullish tone and invites investors to consider whether the market is overlooking Kroger’s future upside.

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 supports larger basket sizes, higher gross margins, and improved earnings quality over time.

Read the complete narrative.

Curious what fuels this double-digit discount to fair value? The narrative projects a leap in both profits and margins, underpinned by strategic moves in private label, new store rollouts, and aggressive cost-cutting. But just how ambitious are these numbers, and what assumptions are baked in? Click through to see if the numbers really add up.

Result: Fair Value of $75.73 (UNDERVALUED)

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

However, ongoing losses in e-commerce and rising labor costs could present challenges for Kroger as it works to achieve its ambitious long-term profitability targets.

Find out about the key risks to this Kroger narrative.

Build Your Own Kroger Narrative

If you want to dig deeper or take a different view, you can build a custom narrative around Kroger’s outlook in just a few minutes. Do it your way.

A great starting point for your Kroger research is our analysis highlighting 4 key rewards and 1 important warning sign 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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