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Kroger Co. (NYSE: KR) recently had an absolutely devastating week in which its stock dropped nearly 28%. This was the result of weak guidance and then an earth-shattering merger announcement between Amazon and Whole Foods on Friday. It seems very bleak for the largest pure play grocer in the United States, but one independent research firm is coming to its defense.

Argus maintained its Buy rating for Kroger but lowered its price target to $30 from $40. This is a 34.6% premium, compared to the $22.29 previous closing price. While the most recent evidence is certainly negative, The firm believes that the recent selling has taken the Kroger shares to attractive levels. At the end of the week, Kroger was trading at an enterprise value of less than 12 times trailing EBIT, while Whole Foods had risen to almost 20 times after the merger announcement.

The firm believes that the presence of Amazon in the brick-and-mortar grocery sector is certainly a concern, but Argus and others have long considered the impact of Amazon becoming more aggressive in the sector.

In the recent earnings report, Kroger once again committed to cutting costs to reinvest in the business. One major initiative is to increase the number of locations that offer online ordering and drive-by pickup. In addition, Kroger is experimenting with a range of delivery options, including delivery by Uber drivers.

According to Argus:

[Kroger] reached $1 billion in annual sales from its own Simple Truth natural and organic brand in just two years and the brand reached $1 billion of organic sales and $1.7 billion of total sales last year. Kroger has a portfolio of successful private brands that generated 26% of the company’s sales, or roughly $30 billion last year as well as an industry leading customer analytics business called 84.51 that delivered billions of personalized coupons in 2016. Kroger already has an order online, pick up at store business that serves more than 649 stores. Digital revenue doubled in the first quarter, and the company has gained market share for 12 consecutive years according to Nielsen. Last year, Kroger gained share in 14 of its 22 markets, held flat in two others.

Shares of Kroger were last seen up about 1.5% at $22.63 on Monday, with a consensus analyst price target of $28.33 and a 52-week range of $20.46 to $37.97.