Evercore on Albertsons (ACI): 'Cultivating Customers; Cost/Macro Headwinds Remain'

Evercore ISI analyst Michael Montani reiterated an In Line rating and $22.00 price target on Albertsons Companies Inc. (NYSE: ACI)

The analyst comments "Albertsons is advancing their customer for life strategy amidst a challenging grocery backdrop. Kroger’s enhanced divestiture package suggests odds are still over 50% for court win (in our view) with a potential judge’s decision likely in Sept-Nov. Bulls point to sticky pharmacy/loyal household growth (both +16% YoY) that should benefit the business as repeat visits drive higher lifetime value. Bears point to near term pressure from pharmacy mix, & GLP-1, shrink, and tech/digital lingering in 1H24. Albertsons cost control productivity muscle and central purchasing are a partial offset. We are trimming our F1H EPS to reflect mix/tech headwinds with stabilizing 2H EPS as productivity builds and compares ease (inflation/SNAP/Cali rent). We view the KR (OP rated) – ACI merger as likely to close by year end ’24, with our $22 ACI Base Case reflecting a probability weighted Bull vs. Bear Case and fundamental outlook. We are hosting an expert webinar with Nielsen’s Lorelei Bergin on 4/26 at 10am for a timely update on hot button topics of price vs. volume, promotions, innovation and GLP-1 impact. "

For an analyst ratings summary and ratings history on Albertsons Companies Inc. click here. For more ratings news on Albertsons Companies Inc. click here.

Shares of Albertsons Companies Inc. closed at $20.23 yesterday.

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