Albertsons Companies slips after BofA warns of near-term earnings pressure
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Bank of America downgraded Albertsons Companies (ACI) following the grocery store operator's second quarter earnings report. The firm's view is that Albertsons (ACI) earnings power and valuation could both see pressure over the next 12 to 18 months.
"A growing number of initiatives at ACI have contributed to operational complexity, competing priorities and higher operating costs without effectively improving key metrics, including customer value proposition, traffic and unit trends, and market share," warned analyst Robert Ohmes.
Looking ahead, Albertsons (ACI) is expected to reinvest cost savings into price and store experience but is still seen facing lower-income consumers continuing to trade down, supplier cost increases that could further challenge affordability, and a competitive grocery environment.
Bank of America has a price objective of $12 on Albertsons (ACI).
Shares of Albertsons (ACI) were down 2.3% in premarket trading to $12.43 vs. the 52-week range of $10.86 to $20.00.
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