Grocery-store chain Kroger's operating margin growth could benefit from a changing product mix and diminishing competition from Wal-Mart.
BMO Capital Markets has upgraded Kroger (NYSE:KR) to outperform from market perform and raised the price target to 58 from 52.
There's less competitive threat from Wal-Mart (NYSE:WMT), BMO says, because Wal-Mart's Neighborhood Market stores have lost market share in about a third of their top 20 market locations in the past several years. Wal-Mart has also been slow to adapt to natural and organic food trends, while Kroger has paid them more attention, according to BMO.
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