Market Pulse50Neutral

The Kroger Co.Opportunity Rank #133(KR) Intrinsic Value & DCF Analysis (2026)

Current Price

$72.70

Last updated: Mar 24, 2026

Price vs Intrinsic Value

$72.70
Price
$266.51
Intrinsic Value
Undervalued by 267%MOS: $213.21

Fundamental Score

55/100
Neutral

Weighted across 6 signals

Narrative Score

65/100
Improving

No change vs previous

The intrinsic value of The Kroger Co. (KR) is estimated at $266.51 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $72.70, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 3.58% long-term growth rate and a 9.00% discount rate (calculated: 6.64%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of The Kroger Co. (KR) is estimated at $266.51 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $72.70, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 3.58% long-term growth rate and a 9.00% discount rate (calculated: 6.64%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$266.51
266.59% upside
20% margin of safety: $213.21
Years: 10Growth Rate: 3.58%
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Capital Efficiency

Average Quarterly ROIC
1.71%
Cost of Capital (estimated)11%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

55/100
NeutralWeighted across 6 signals
DCF Discount
266.6% discount to price
100
FCF Yield
24.4% trailing FCF yield
100
ROIC vs WACC
ROIC 1.7% vs WACC 11.0% (0.2x)
8
Net Debt / FCF
1.2x net debt to FCF
54
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
3.0% 5Y FCF CAGR
25
Strengths: DCF Discount, FCF Yield. Concerns: ROIC vs WACC, FCF CAGR (5Y).

Narrative Details

65/100
Improving
Vs 6-Month Baseline:Below Avg (22nd pct)Weighted across 6 recent drivers
Trend: StableConfidence: 85%Updated: 2h ago
Sources: 117 (107 News · 10 Analyst)
Drivers(last 30 days)
23 regulatory scrutiny+0.7
79 news sentiment+0.7
3 earnings beat+0.2
Analyst downgrades-0.0
Macro headwinds+0.0
Legal risk-0.0

Investment Coach

Updated 18h ago
BUYConfidence: 61%
Thesis
The Kroger Co. is significantly undervalued with an estimated fair value approximately 268% above its current price, supported by constructive fundamentals and a stable narrative score. Despite trailing returns relative to its cost of capital, the company shows strong free cash flow yield and buyback activity, indicating potential for value realization.
Key Risk
The key risk is the company's return on invested capital (ROIC) remaining below its weighted average cost of capital (WACC), which could undermine value creation.
Signals To Watch
  • Monitor whether valuation discount remains above 10%.
  • Track ROIC vs WACC spread for sustained improvement.
  • Follow narrative trend for meaningful shifts in the score direction.
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Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 3.58%5 Year CAGR: 3.03%

Free Cash Flow (in millions)

TTM2025202420232022202120202019201820172016201520142013201220112010200920082007
$11,239$9,811$10,692$7,389$8,804$9,680$7,792$7,131$6,222$7,971$8,266$7,046$5,710$5,016$4,556$5,285$5,218$5,045$4,707$4,034

How Intrinziq Estimates Fair Value

Intrinziq estimates The Kroger Co.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

The Kroger Co.Consumer Defensive

The Kroger Co. operates as a 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 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 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 1,613 fuel centers. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.