Kroger Co. (NYSE: KR) is scheduled to release its fiscal fourth-quarter financial results before the markets open on Thursday. Analysts are calling for $0.55 in earnings per share (EPS) and $28.83 billion in revenue. In the same period of last year, the specialty retailer said it had $0.48 in EPS and $28.09 billion in revenue.

One of the top changes in Warren Buffett’s portfolio this last go around, aside from selling some key bank holdings, was that Buffett’s portfolio managers purchased $550 million or so worth of Kroger shares.

After Kroger stock popped at the start of November, it spent the rest of the fourth quarter trading mostly between $27 and $29. It is possible that the purchases were made back when Kroger was trading under $25, but Buffett probably wouldn’t care if his purchase price was 10% higher or 10% lower in his own long-term value hunt.

It seems that Kroger would fit into the acquisition patterns of companies that Berkshire Hathaway has rolled into its conglomerate structure. Despite the grocery store dilemma of operating on razor-thin margins, Kroger has the fortitude, size and merchandising that can survive in good times and bad. Kroger also is likely to withstand the rise of Amazon’s Whole Foods, and the $13.7 billion that Bezos paid for Whole Foods compares to a current market cap of $22 billion for Kroger. And, unlike at the big-box retailers, shoppers do not have to pay an annual fee to buy groceries there.

Kroger is not an expensive stock compared to the stock market as a whole. Its valuation when Buffett bought the shares was likely 12 to 13 times expected earnings, handily lower than the 15 to 20 times expected earnings for most other S&P base economy companies.

Excluding Wednesday’s move, Kroger stock had outperformed the broad markets with a gain of about 1% year to date. In the past 52 weeks, the share price was up closer to 2%.

Here’s what analysts were saying ahead of the report:

• JPMorgan has a Neutral rating with a $28 price target.
• Telsey Advisory Group has a Market Perform rating.
• Morgan Stanley rates it as Equal Weight with a $27 price target.
• Evercore ISI’s Outperform rating comes with a $33 price target.
• Deutsche Bank has a Hold rating with a $28 price target.

Kroger stock was last seen up about 1.5% on Wednesday to $29.82, in a 52-week range of $20.70 to $30.73. The consensus price target is $28.15.

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