On Monday, Jefferies upgraded Ahold Delhaize shares from "hold" to "buy," with a target price increased from €39.5 to €42.

In a research note, the broker points out that three factors have recently weighed on the supermarket group's share price, which has a strong presence in the US: the fall of the dollar, fierce competition amongst sector players in terms of pounds, and Amazon's stated ambitions in the food sector.

We believe that these concerns are exaggerated, the analyst said, who believes that the stock's substantial devaluation, which now reflects a free cash flow yield of 7.8%, ignores the current strength of the business and the possibility that the group will engage in consolidation operations in order to respond to changes in the sector.

As such, Jefferies believes that Kroger currently appears to be the most logical partner for a potential merger.