Company Overview - Albertsons Companies (NYSE: ACI) is one of the largest companies in the food and drug retailing sector in the United States, offering a variety of products including beauty care, groceries, pharmacy items, and general merchandise. The company also operates fuel stations, pharmacies, coffee shops, and distribution facilities under various banners [5]. Analyst Ratings and Price Targets - Joe Feldman from Telsey Advisory has reaffirmed an outperform rating for Albertsons Companies with a target price of $24, indicating an upside potential of over 44% from the current stock price [1]. - RBC Capital analyst Steven Shemesh has also reaffirmed an outperform rating, estimating a target price of $21, which represents an upside of over 26% from the current level. Shemesh highlights that the stock is trading at a significant discount, with a forward adjusted EBITDA multiple of 4.5x [4]. Financial Projections - Feldman has forecasted over $1 billion in adjusted EBITDA based on a 2.5% growth in identical store sales. He also projects an adjusted EPS of $0.68, supported by easing inflation and increased demand for private brands and digital product offerings. However, he notes that cash outlays on pricing, workforce, and technology may offset some financial impacts [2]. - The broader grocery industry is experiencing low-single digit growth, while U.S. Food & Beverages retail sales are projected to grow by 2%-3%, indicating a positive outlook for relevant industries [3].

Core Insights - Albertsons Companies, Inc. (ACI) is recognized as one of the 12 Best Food Stocks to Buy in 2026 [1] Group 1: Analyst Ratings and Price Targets - BofA has maintained a Neutral rating on ACI, lowering its price target from $22 to $20, while adjusting its Fiscal Year 2026 EPS estimate to $2.12, aligning with the forecast range of $2.08-$2.16 [2] - Telsey Advisory reaffirmed an Outperform rating but reduced its price objective for ACI from $24 to $22, citing higher-than-expected Q3 earnings driven by growth in digital and pharmacy sectors, along with improvements in core grocery units [3] Group 2: Performance Drivers - The growth in pharmaceutical and digital channels significantly contributed to ACI's Q3 sales and earnings, highlighting the importance of digital engagement, media collective development, consumer value improvement, capability updates, and productivity increases in enhancing performance [2][3] Group 3: Market Position - ACI is one of the largest supermarket operators in the United States, indicating its substantial presence in the retail food sector [4]

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Core Insights - ACI Worldwide is integrating Paze online checkout into its Pay.On payment orchestration platform, enhancing digital wallet access for U.S. consumers [1] - The integration aims to facilitate consumer adoption of digital wallets, which is accelerating in the current market [1] Company Overview - ACI Worldwide powers $7 trillion in payments annually, indicating its significant role in the payments industry [1] - The collaboration with Early Warning Services to offer a digital wallet through participating banks and credit unions reflects ACI's strategy to expand its service offerings [1] Industry Trends - The integration of digital wallets into payment orchestration platforms is a response to the growing consumer demand for convenient online payment solutions [1] - The trend towards digital wallet adoption is indicative of broader shifts in consumer behavior towards digital payment methods [1]

Core Viewpoint - Albertsons Companies (NYSE: ACI) presents a compelling investment opportunity for 2026, with strong earnings performance despite bearish price action, indicating potential for stock price recovery and significant gains [2][3]. Valuation and Earnings - Albertsons trades at a low valuation of 8x current-year earnings and 6x the 2030 consensus forecast, which is a discount compared to peers like Kroger, which trades at 12x current earnings [4]. - The company has consistently outperformed earnings expectations, reinforcing a bullish outlook despite current market conditions [2][4]. Dividend Yield - Albertsons offers a reliable dividend of 60 cents, yielding approximately 3.5%, which is higher than competitors like Kroger at 2.25% [5]. - The dividend payout is under 30% of the fiscal year 2025 earnings consensus, indicating sustainability and potential for growth [5]. Market Position and Recovery - Following a failed merger with Kroger, Albertsons is trading at a deep value, with institutional and analyst trends suggesting stock accumulation in 2025 as prices fell [6]. - The combination of a favorable value-and-yield proposition positions Albertsons for a robust rebound in the market [6].

Core Viewpoint - Albertsons Companies Inc. is experiencing a decline in stock price, but there is a positive sentiment among analysts regarding potential earnings growth, which may lead to a trend reversal in the future [1][3][4]. Group 1: Stock Performance - The stock price of Albertsons is currently $16.38, reflecting a slight increase of 1.80% or $0.29, after a decline of 5.7% over the past four weeks [2][5]. - The stock has fluctuated between $15.95 and $16.68 during the trading day, indicating volatility [2]. - Over the past year, the stock reached a high of $23.20 and a low of $15.80, showcasing significant price movement [3]. Group 2: Analyst Ratings and Market Sentiment - Telsey Advisory maintains an "Outperform" rating for Albertsons, with a revised price target adjusted from $24 to $22 [1][5]. - There is a strong consensus among Wall Street analysts to raise earnings estimates for Albertsons, suggesting a potential trend reversal for the stock [3][4]. - The current market conditions and analyst sentiment indicate potential opportunities for investors, particularly due to the stock's oversold status [4]. Group 3: Company Overview - Albertsons is a leading grocery retailer in the United States, offering a wide range of products including groceries, pharmacy services, and fuel [1]. - The company competes with major grocery chains such as Kroger and Walmart [1]. - Albertsons has a market capitalization of approximately $9 billion, with a trading volume of 3,323,899 shares on the NYSE [3].

Core Insights - Albertsons Companies, Inc. (ACI) reported third-quarter fiscal 2025 results with sales below expectations but earnings exceeding estimates, showing year-over-year growth in both top and bottom lines [1][2]. Sales Performance - Net sales and other revenues reached $19,123.7 million, slightly below the Zacks Consensus Estimate of $19,160 million, marking a 1.9% year-over-year increase driven by a 2.4% rise in identical sales, an 18% increase in pharmacy sales, and a 21% jump in digital sales [5][10]. - The temporary government shutdown and delayed SNAP funding negatively impacted identical sales by 10-20 basis points [6]. Earnings and Margins - Adjusted quarterly earnings were 72 cents per share, beating the Zacks Consensus Estimate of 67 cents, with a 1.4% increase from 71 cents in the prior-year period [4][10]. - Gross profit remained flat at $5.25 billion, with a gross margin contraction of 50 basis points year-over-year to 27.4% [6][10]. Expenses and Cost Management - Selling and administrative expenses increased by 0.9% to $4.76 billion, with a decline of 20 basis points year-over-year as a percentage of net sales [8]. - Adjusted EBITDA declined 2.5% year-over-year to $1.04 million, with an adjusted EBITDA margin of 5.4%, down 30 basis points year-over-year [9]. Strategic Initiatives - The company is advancing its strategic priorities by enhancing customer value propositions, expanding digital capabilities, and embedding AI and data into core operations [3]. - Ongoing investments in technology modernization and store enhancements are part of the long-term transformation strategy, despite a cautious consumer environment [3]. Financial Position - As of the end of the quarter, cash and cash equivalents totaled $195.1 million, with long-term debt and finance-lease obligations at $8.42 billion and total stockholders' equity at $2.50 billion [11]. - The net debt to adjusted EBITDA ratio was 2.29X, indicating a strong balance sheet and capacity for growth funding [13]. Future Outlook - The company updated its fiscal 2025 expectations, projecting identical sales growth between 2.2% and 2.5%, adjusted EBITDA between $3.83 billion and $3.88 billion, and adjusted earnings per share between $2.08 and $2.16 [15][16]. - The anticipated impacts of the Inflation Reduction Act's Medicare Drug Price Negotiation Program are expected to reduce pharmacy sales, affecting fiscal year identical sales by 16-18 basis points [17].

Core Viewpoint - Albertsons Companies, Inc. (ACI) is experiencing significant selling pressure but is positioned for a potential trend reversal due to being in oversold territory and positive earnings outlook from analysts [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2]. - ACI's current RSI reading is 24.44, suggesting that the heavy selling pressure may be exhausting itself and a trend reversal could occur soon [5]. Group 2: Fundamental Analysis - Analysts have raised earnings estimates for ACI, with the consensus EPS estimate increasing by 0.5% over the last 30 days, indicating a potential for price appreciation [7]. - ACI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential for a turnaround [8].

Core Insights - Albertsons Companies reported increased sales and strong digital growth in Q3 of fiscal 2025, but net income declined compared to the previous year [1][2] Financial Performance - Net income for Q3 2025 was $293.3 million, or $0.55 per share, down from $400.6 million, or $0.69 per share, in Q3 2024 [1] - Adjusted net income reached $390.3 million, or $0.72 per share, compared to $420.3 million, or $0.71 per share, a year earlier [1] - Operating income decreased to $489.7 million from $518.5 million in the same period last year [2] Revenue Growth - Net sales and other revenue rose 1.9% year on year to $19.12 billion, driven by higher pharmacy sales and growth in identical sales [2] - Identical sales increased by 2.4% during the quarter, while digital sales advanced by 21% [3] - Loyalty membership grew by 12% to 49.8 million [3] Profitability Metrics - Adjusted EBITDA totaled $1.03 billion, equivalent to 5.4% of net sales and other revenue [3] - Gross margin declined to 27.4% from 27.9% a year earlier, due to higher delivery and handling costs and a larger contribution from lower-margin pharmacy sales [4] Expenses and Outlook - Selling and administrative expenses fell to 24.9% of net sales and other revenue, compared to 25.1% in the prior-year quarter [4] - Net interest expense increased to $116 million from $109 million, and income tax expense rose to $84.4 million [5] - The company narrowed its fiscal 2025 outlook, forecasting identical sales growth of 2.2% to 2.5% and adjusted EBITDA of $3.82 billion to $3.87 billion [5] Strategic Initiatives - The company continues to project an effective income tax rate of 23% to 24% and capital expenditure of $1.8 billion to $1.9 billion for the financial year [6] - CEO Susan Morris highlighted that investments in technology and AI are reshaping operations and enhancing customer service [6]

Financial Performance - Net sales for the 12 weeks ended November 29, 2025, were $19,123.7 million, an increase of 1.9% compared to $18,774.5 million for the same period in 2024[9] - Operating income for the 12 weeks ended November 29, 2025, was $489.7 million, a decrease of 5.5% from $518.5 million in the same period of 2024[9] - Net income for the 40 weeks ended November 29, 2025, was $698.2 million, down 11.2% from $786.8 million in 2024[11] - Retail segment sales for the 12 weeks ended November 29, 2025, were $18,926.9 million, an increase from $18,595.0 million for the same period in 2024, representing a growth of 1.8%[84] - Net income for the quarter ending September 7, 2024, was reported at $400.6 million, reflecting a strong performance[15] - The company reported a net income of $293.3 million for the 12 weeks ended November 29, 2025, compared to $400.6 million for the same period in 2024, a decline of 26.7%[88] Assets and Liabilities - Total current assets increased to $7,096.8 million as of November 29, 2025, compared to $6,559.0 million as of February 22, 2025, reflecting a growth of 8.2%[8] - Total liabilities rose to $24,591.5 million as of November 29, 2025, up from $23,369.5 million as of February 22, 2025, representing an increase of 5.2%[8] - Long-term debt and finance lease obligations increased to $8,417.0 million as of November 29, 2025, from $7,762.5 million as of February 22, 2025, an increase of 8.4%[8] - As of November 29, 2025, total stockholders' equity is $2,501.8 million, with a net income of $293.3 million for the period[13] Cash Flow and Investments - The company reported a net cash provided by operating activities of $1,649.6 million for the 40 weeks ended November 29, 2025, compared to $1,922.1 million in 2024, a decrease of 14.1%[11] - Cash and cash equivalents decreased to $195.1 million as of November 29, 2025, from $293.6 million as of February 22, 2025, a decline of 33.6%[8] - The company issued long-term debt amounting to $2,585.0 million during the 40 weeks ended November 29, 2025, compared to $50.0 million in the previous year, indicating a significant increase in financing activities[11] Shareholder Activities - The company declared cash dividends of $0.15 per common share, totaling $77.1 million in the latest quarter[13] - The Company repurchased a total of 64.1 million shares of common stock for $1,211.6 million during the 40 weeks ended November 29, 2025, including $600.0 million under an accelerated share repurchase agreement[23] - The total number of Class A Common Stock shares increased to 600,523,680, up from 594,445,268 shares as of February 24, 2024[15] Tax and Expenses - The effective tax rate for the 12 weeks ended November 29, 2025, was 22.3%, up from 3.5% for the same period in 2024, primarily due to state income taxes and the absence of discrete state income tax benefits recognized in the prior year[24] - Employee costs for the 40 weeks ended November 29, 2025, totaled $9,166.4 million, an increase from $8,956.2 million in the prior year, reflecting a rise of 2.3%[84] - Merchandise costs, including advertising, distribution, and freight, for the 40 weeks ended November 29, 2025, were $44,500.9 million, compared to $43,379.7 million in 2024, an increase of 2.6%[84] Legal and Regulatory Issues - The Company is facing allegations of overcharging federal government healthcare programs, with claims exceeding $100 million before trebling and excluding penalties[63] - The U.S. Supreme Court issued an opinion adverse to the Company on June 1, 2023, reversing lower court rulings in the Proctor and Schutte cases[60] - The District Court set a pretrial conference for the Schutte case on March 4, 2024, with a trial date of April 29, 2024[61] - The Company recorded a liability of $21.5 million for settlements related to opioid litigation in New Mexico and Nevada, which was paid by insurers in Q4 of fiscal 2022[68] - The Company is vigorously defending claims in approximately 81 lawsuits related to the opioid epidemic, with ongoing discovery in some cases[67] Inventory and Cost Management - The Company recorded a LIFO expense of $13.2 million for the 12 weeks ended November 29, 2025, compared to $3.5 million for the same period in 2024, indicating a significant increase in inventory costs[20] - The Company’s inventories consist primarily of finished goods, with LIFO inventory costs based on management's estimates of expected year-end inventory levels and inflation rates[20] Comprehensive Income - Total comprehensive income for the 40 weeks ended November 29, 2025, was impacted by a current-period other comprehensive loss of $15.8 million, compared to a gain of $2.9 million in the prior year[79] - The ending accumulated other comprehensive income (AOCI) balance as of November 29, 2025, was $78.9 million, down from $90.9 million at the end of the same period in 2024[79]