Kroger shares gain the most in 1 1/2 weeks on Wednesday, company finalizes sale of You Technology to Inmarsat Plc

March 14, 2019 11:09 am

Kroger Company (KR) said on Wednesday that it had finalized the sale of You Technology LLC, a digital coupon and digital rebate publishing platform, to Inmarsat Plc for as much as $565 million.

The after-tax cash proceeds from the sale are to be used by Kroger to trim debt, the department store chain said.

Shares of Kroger Company closed higher for the fourth time in the past ten trading sessions in New York on Wednesday. It has also been the sharpest daily surge since March 4th. The stock went up 1.02% ($0.25) to $24.73, after touching an intraday high at $24.96, or a price level not seen since March 8th ($25.68).

Shares of Kroger Company have retreated 10.07% so far in 2019 compared with a 12.13% gain for the benchmark index, S&P 500 (SPX).

In 2018, Kroger’s stock went up 0.18%, thus, it outperformed the S&P 500, which registered a 6.24% loss.

YouTech’s cloud-based retail platform provides the link between on-line engagement with product manufacturers and in-store purchases.

“The monetization of our investment in YouTech and long-term agreement with Inmar demonstrate how Kroger can create value in different ways,” Stuart Aitken, Kroger’s senior vice president of alternative business, said in a statement.

“We are excited about the additional value that can be brought forward through future partnerships to create customer value,” Aitken added.

“We look forward to our new strategic relationship with Inmar, which will bring Kroger’s unique assets and personalization expertise together with Inmar’s technology solutions to drive more innovation and value for Kroger customers and CPG partners,” Yael Cosset, Kroger’s Chief Digital Officer, said.

Meanwhile, as part of the acquisition, YouTech’s Chief Executive Cheryl Black will become part of Inmarsat’s Executive Management Team by assuming the role of Vice President and General Manager, Retail Solutions.

According to CNN Money, the 24 analysts, offering 12-month forecasts regarding Kroger Company’s stock price, have a median target of $28.50, with a high estimate of $37.00 and a low estimate of $22.00. The median estimate represents a 15.24% upside compared to the closing price of $24.73 on March 13th.

The same media also reported that 15 out of 26 surveyed investment analysts had rated Kroger Company’s stock as “Hold”, while 8 – as “Buy”. On the other hand, 3 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Kroger Company (KR) are presented as follows:

Central Pivot Point – $25.96
R1 – $27.59
R2 – $30.70
R3 – $32.33
R4 – $33.95

S1 – $22.85
S2 – $21.22
S3 – $18.11
S4 – $14.99

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