In a report released yesterday, Robert Ohmes from Bank of America Securities reiterated a Hold rating on Albertsons Companies, with a price target of $20.00.
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Robert Ohmes has given his Hold rating due to a combination of factors tied to both near-term pressures and longer-term opportunities. He acknowledges that Albertsons is executing well in areas like pharmacy and digital, which supported better-than-expected earnings in the most recent quarter. However, he notes that this growth is partly driven by flu and COVID vaccinations that likely pulled demand forward, while the mix shift toward lower-margin pharmacy and online channels is weighing on gross margins. In addition, he points out that accelerating promotions and the impact of the Inflation Reduction Act on Medicare drug pricing are expected to slow reported same-store sales growth and pressure profitability in the near term.
At the same time, Ohmes highlights several strategic initiatives that support a constructive long-term view, including pushing higher penetration of private-label products, targeted price investments, and efforts to deepen engagement across digital and pharmacy channels, where multi-channel customers spend significantly more. He also cites a sizable multiyear cost-savings program that should help offset some of the revenue and margin headwinds over time. Nonetheless, he reduces his earnings forecasts and price objective, reflecting softer industry conditions, pharmacy-specific headwinds, and lower market valuation multiples. Taken together, these positives and negatives lead him to conclude that the upside from the current share price is limited, justifying a Neutral (Hold) rating rather than a more bullish stance.
In another report released yesterday, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $18.50 price target.
ACI’s price has also changed moderately for the past six months – from $22.740 to $16.090, which is a -29.24% drop .