SoFi CEO enters prepaid forward contract on 1.5 million shares
On Thursday, Evercore ISI made an adjustment to Albertsons Companies Inc. (NYSE: NYSE:ACI) stock’s price target, reducing it to $22 from the previous $23, while maintaining an In Line rating. Currently trading at $21.15 with a P/E ratio of 12.7, InvestingPro analysis suggests the stock is slightly overvalued based on its proprietary Fair Value model. The revision followed Albertsons’ fourth-quarter financial results, which surpassed market expectations. The grocery chain reported same-store sales growth of 2.3%, an EBITDA of $855 million, and earnings per share of 46 cents. These figures exceeded analysts’ predictions of 1.8% for same-store sales, $834 million for EBITDA, and 40 cents for earnings per share. With trailing twelve-month revenue of $80.4 billion and an EBITDA of $3.83 billion, InvestingPro data shows the company maintains a "GOOD" financial health score of 2.6 out of 4.
Despite the better-than-expected results, Evercore ISI analyst Michael Montani noted that the upcoming fiscal year 2025 is anticipated to be a year of investment for Albertsons, with an expected 6% decline in EBITDA, excluding the impact of a 53rd week. The investments are aimed at strengthening the company’s foundation for anticipated growth in 2026. The $22 price target is based on a 10x multiple of the firm’s projected fiscal year 2026 earnings per share, indicating a modest upside if Albertsons achieves a 2% increase in same-store sales and an acceleration in underlying EBITDA growth.
Montani also mentioned several factors that could potentially speed up Albertsons’ growth algorithm, including better inflation pass-through from tariffs, increased pharmacy market share gains due to the decline of competitors such as Rite Aid (NYSE:US90274J5618=UBSS), Walgreens, and CVS, or a favorable outcome in the ongoing litigation against Kroger (NYSE:KR) that could lead to a share buyback program.
The analysis recognized the balanced risk-reward profile for Albertsons, noting that the stock is inexpensive compared to Kroger and other grocery retailers. However, the company is also expected to face challenges from increased competition and the need for investment in pricing, technology, and labor. With a dividend yield of 2.84% and analyst price targets ranging from $19 to $27, InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, including detailed valuation metrics and growth projections. For investors seeking exposure to the food retail sector, Evercore ISI suggested Kroger as a preferred option, citing its valuation at 13 times earnings, built-in share lever in ESI, stronger price positioning, and larger scale.
In other recent news, Albertsons Companies reported strong fourth-quarter 2025 earnings, surpassing analyst expectations with an adjusted earnings per share of $0.46, compared to the forecasted $0.41. The company also exceeded revenue forecasts, reporting $18.8 billion against an expected $18.63 billion. Despite these positive results, UBS analyst Mark Carden adjusted the price target for Albertsons, lowering it to $22 from $24, while maintaining a Neutral rating due to anticipated investment needs in fiscal year 2025. Albertsons’ guidance indicates an approximate 5.5% decline in EBITDA for the fiscal year 2025, diverging from its long-term growth algorithm. This downturn is attributed to strategic initiatives for unit growth and productivity enhancements. The company remains committed to its growth strategy, with expectations of identical sales growth between 1.5% and 2.5% for fiscal year 2025. Albertsons also plans significant investments in its digital and pharmacy sectors, which saw digital sales grow by 24% and pharmacy revenue increase by 18% in the fourth quarter.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.