UPDATE: UBS Starts Albertsons Companies Inc. (ACI) at Neutral

December 14, 2021 6:35 AM EST
Get Alerts ACI Hot Sheet
Price: $29.29 +3.61%

Rating Summary:
    16 Buy, 16 Hold, 7 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 7 | Down: 9 | New: 42
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(Updated - December 14, 2021 6:36 AM EST)

UBS analyst Mark Carden initiates coverage on Albertsons Companies Inc. (NYSE: ACI) with a Neutral rating and a price target of $33.00.

The analyst comments "We initiate coverage of ACI with a Neutral rating & a $33 PT. ACI has multiple factors working in its favor, incl. nat'l scale (top 4 US food retailer), regional density (#1 or #2 player in two thirds of the 121 MSAs it operates in), valuable real estate (~$11 bn pre
COVID), & attractive local demographics data shows its local trade areas have higher HH incomes relative to COST, KR, & TGT). It's investing in its transformation (e.g. fresh, private label, customer engagement, digital). Plus, it recently brought on board a President & CFO w. a track record of achieving cost outs at BBY (achieving a similar 1% reduction in COGS would be a 70-75 bp OM tailwind at ACI. If ACI could reach this by FY’24 & flow it through to the bottom line, we est. it would add 25-30% to EPS). ACI also has opportunities in alt. profit streams (it recently brought on the former head of TGT’s Roundel to lead its media network). Still,
ACI’s initiatives will likely take time to mature, & we expect them be overshadowed by challenging multi-year compares in the near term. We think its risk/reward is balanced."

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 $31.32 yesterday.


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