NEW YORK -- Kroger's stock fell Thursday as an analyst cut his rating and price target for the nation's largest traditional supermarket chain, saying that there's some industry risks facing the company that are of concern.
Edward Kelly of Credit Suisse said in a client note that he still thinks Kroger is a well-managed company in position for long-term stock gains, but he said the business is not immune to factors hitting the supermarket sector such as declining volumes, low inflation and rising competition.
The analyst also believes that Wall Street's estimates for Kroger for 2014 are "fairly high" considering the difficulties the sector is dealing with.
Kelly lowered Kroger, which owns its namesake locations as well as Ralphs, Fry's and other chains, to "Neutral" from "Outperform" and reduced its price target to $39 from $48.
Kroger does not comment on analyst reports. The Cincinnati company runs more than 2,400 stores in 31 states.
Shares of Kroger Co. declined $1.77, or 4.5 percent, to $37.49 in afternoon trading. The stock has gained about 43 percent in the past year, outperforming the broader market.