04:19 PM EST, 03/08/2024 (MT Newswires) -- Kroger's ( KR ) Q4 results demonstrate the company knows how to generate earnings, UBS said in a note emailed Friday .

Despite facing increased pressures on revenue throughout 2023, Kroger ( KR ) managed to accelerate its earnings growth, finishing the year on a strong note with a 15% year-over-year increase, it added.

"[Kroger ( KR )] is gaining momentum in alternative profits, which reached [$1.3 billion] in '23," UBS said. "Further, the company expects high-growth profit streams to maintain their momentum, with Kroger Precision Marketing expected to grow north of 20%."

The 2024 estimates are expected to move higher, based on Q4 results. "In other words, [Kroger's ( KR )] multiple remains reasonable in our view," UBS said.

UBS adjusted its price target to $58 from $50, while maintaining the neutral rating.

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