Analyst Simeon Gutman of Morgan Stanley maintained a Hold rating on Albertsons Companies, retaining the price target of $20.00.
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Simeon Gutman has given his Hold rating due to a combination of factors impacting Albertsons Companies. The company is expected to see its EBITDA bottom out in 2025, with a gradual recovery anticipated in 2026. While investments are likely to support growth in 2026, there is a risk of below-average growth, particularly in the core grocery segment, which has shown tepid performance despite strong growth in pharmacy and e-commerce categories.
Gutman’s analysis indicates a balanced risk/reward scenario with potential upside and downside to the stock’s price target. The core grocery sales have been relatively flat, and although pharmacy and e-commerce are growing rapidly, they contribute to near-profitless growth due to lower margins. Additionally, market share dynamics show a widening gap with competitors, which adds to the uncertainty. Overall, while there are positive long-term opportunities, the short to medium-term outlook remains cautious, justifying the Hold rating.
In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a $24.00 price target.
ACI’s price has also changed slightly for the past six months – from $20.420 to $21.010, which is a 2.89% increase.