In a report released today, Simeon Gutman from Morgan Stanley maintained a Hold rating on Albertsons Companies (ACI – Research Report), with a price target of $20.00.
Simeon Gutman has given his Hold rating due to a combination of factors impacting Albertsons Companies. Despite positive developments such as strong eCommerce sales and improved identical sales, the grocery sector remains stagnant, and the company faces margin pressures from a shift in sales mix and ongoing investments. These challenges are expected to persist through the first half of 2025, delaying a return to the company’s long-term growth algorithm until 2026.
The Hold rating reflects a balanced risk/reward scenario, with limited visibility into a significant positive shift in adjusted EBITDA and EPS growth. While the company has a history of successful strategy execution, particularly in eCommerce, the intensifying competition in the grocery market and potential macroeconomic headwinds pose challenges. Albertsons is currently valued at a relatively low multiple, which could allow for a re-rating if earnings revisions turn positive later in 2025.
According to TipRanks, Gutman is a 4-star analyst with an average return of 1.8% and a 57.26% success rate. Gutman covers the Consumer Cyclical sector, focusing on stocks such as Advance Auto Parts, Ulta Beauty, and Wayfair.
In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a $24.00 price target.