Overall options volume is running at four times what's typically seen at this point
Options traders are taking aim at Kroger Co (NYSE:KR) ahead of the company's first-quarter earnings report, due out before the open tomorrow. The Cincinnati-based grocery chain operator is seeing four times the average intraday total volume exchanging hands, with puts more than doubling calls. Most popular is the June 43 put, where new positions are being opened.
A look at Kroger stock's history of post-earnings reactions during the past two years shows a mostly positive response. During its last eight reports, five of these next-day sessions were higher, including a 5.4% pop in March. The security averaged a post-earnings swing of 6.4%, regardless of direction. This time around, the options market is pricing in a higher move of 8.8%.
KR was last seen up 0.8% to trade at $47.22, after a pullback that was captured at the $44.40 area earlier this month. The security is now on track for its fifth-straight win, and is up nearly 6% year-to-date.
Analysts are split on the security. Of the 15 covering brokerages, eight recommend a tepid "hold," against seven that say "strong buy." Meanwhile, the 12-month average price target of $52.13 is a 10.6% premium to KR's current perch.