Morgan Stanley Downgrades Albertsons (ACI) Rating, Cuts Price Target by 30%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: seekingalpha
- Market Share Risk: Morgan Stanley analyst Simeon Gutman highlights that Albertsons faces further market share erosion by 2026, particularly as its reliance on pharmacy sales appears vulnerable amid intensifying competition.
- Pharmacy Sales Decline: The overall industry headwind in the pharmacy category, attributed to the Inflation Reduction Act and slowing GLP-1 sales, is expected to decline by 85 to 155 basis points, which could severely impact Albertsons and exacerbate its share loss.
- Intensifying Competition: With Amazon and Walmart expanding into fresh delivery, traditional retailers like Albertsons and Kroger are at risk of continued market share loss, as Gutman anticipates that the trend of “the big getting bigger” will persist.
- Rating and Price Target Adjustment: Morgan Stanley downgraded Albertsons from Equalweight to Underweight and cut its price target by 30% to $144, suggesting a 21% downside from Wednesday’s closing price, reflecting a bearish outlook on the company’s growth prospects.
Analyst Views on ACI
Wall Street analysts forecast ACI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ACI is 23.58 USD with a low forecast of 20.00 USD and a high forecast of 29.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
9 Buy
4 Hold
0 Sell
Moderate Buy
Current: 17.710
Low
20.00
Averages
23.58
High
29.00
Current: 17.710
Low
20.00
Averages
23.58
High
29.00
About ACI
Albertsons Companies, Inc. is a food and drug retailer in the United States. The Company is engaged in the operation of food and drug retail stores that offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. It operates approximately 2,257 retail stores with 1,720 in-store pharmacies, 405 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Company operates stores across 35 states and the District of Columbia under 22 banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, ACME, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci's Food Lovers Market. Its own brands include Signature SELECT, Open Nature, Lucerne, Waterfront BISTRO, Signature Reserve and Value Corner, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
