Kroger still has upside even if its deal to acquire Albertsons doesn’t go through, according to Jefferies. The firm upgraded the grocery store chain to buy from hold. It also upped its price target to $73 per share from $54, implying more than 21% upside from Monday’s close. The company initially announced plans to acquire peer grocery store chain Albertsons in 2022. However, regulators sued to block the deal earlier this year over concern it could result in higher prices for consumers. KR YTD mountain Kroger stock. But Jefferies analyst Rob Dickerson said food trends at Kroger stores have been improving recently and serve as one of the positive catalysts in a scenario where the Albertsons deal falls through completely. Dickerson also noted that Kroger would end up keeping the roughly $6 billion worth of debt it raised for the deal, which could be used for buybacks and boost the stock. “The KR team has proven adept at managing costs in a low margin business, which bodes for efficiency improvement, synergy potential, and accretion potential if the proposed buyout of ACI gets approval,” Dickerson said. “If not, KR will have releveraged the balance sheet that we anticipate will be used partially to resume share buybacks, while at the same time a more profitable fuel / total business is producing sustained strong CFO that will also be utilized for the same purposes, in our view,” the analyst added. Kroger shares were up 1% in the premarket following the upgrade. Year to date, they have gained 31.6%. Analysts are somewhat split on the grocery store chain. LSEG data shows that 12 of the 24 analysts covering the company have a buy or strong buy rating, while the remaining 10 rate it as a hold.