Albertsons Companies (NYSE:ACI) - Share price, News & Analysis

Q: What is the Fair Price of ACI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ACI ($28.07) is trading below our estimate of [[fair value]] ($58.42)

ACI fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	5/6
Financial Health	4/6
Dividends	3/6

ACI Stock Overview

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States.

Rewards

Trading at 51.9% below our estimate of its fair value

Earnings are forecast to grow 2.79% per year

Earnings grew by 143.8% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Albertsons Companies Competitors

Casey's General Stores

NasdaqGS:CASY

US$7.8b

Kroger

NYSE:KR

US$33.8b

Grocery Outlet Holding

NasdaqGS:GO

US$3.9b

Sprouts Farmers Market

NasdaqGS:SFM

US$3.1b

Price History & Performance

Summary of all time highs, changes and price drops for Albertsons Companies
Historical stock prices
Current Share Price	US$28.07
52 Week High	US$37.99
52 Week Low	US$25.89
Beta	0.45
1 Month Change	5.81%
3 Month Change	-6.31%
1 Year Change	-5.96%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	81.68%

Recent News & Updates

Aug 08

Albertsons ticks higher on Ahold takeover speculation

Albertsons (NYSE:ACI) rose 2.5% on speculation about a potential Ahold (OTCQX:ADRNY) deal as the supermarket retailer is under a strategic review. Albertsons (ACI) shares ticked higher after Gordon Haskett highlighted that two of Albertson's (ACI) jets were spotted at Ahold's home airport in Bedford, Massachusetts last week, according to jet tracking data. Recall in late June Albertsons (ACI) disclosed that a lock-up agreement with the company's sponsors was extended until September as the supermarket chain continues a strategic review. Developing story ...

Aug 02

Does Albertsons Companies (NYSE:ACI) Deserve A Spot On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Shareholder Returns

	ACI	US Consumer Retailing	US Market
7D	3.8%	0.9%	1.3%
1Y	-6.0%	-2.1%	-11.7%

Return vs Industry: ACI underperformed the US Consumer Retailing industry which returned -2.1% over the past year.

Return vs Market: ACI exceeded the US Market which returned -11.7% over the past year.

Price Volatility

Is ACI's price volatile compared to industry and market?
ACI volatility
ACI Average Weekly Movement	4.8%
Consumer Retailing Industry Average Movement	6.1%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: ACI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: ACI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1860	195,750	Vivek Sankaran	https://www.albertsonscompanies.com

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It also manufactures and processes food products for sale in stores.

Albertsons Companies Fundamentals Summary

How do Albertsons Companies's earnings and revenue compare to its market cap?
ACI fundamental statistics
Market Cap	US$15.38b
Earnings (TTM)	US$1.36b
Revenue (TTM)	US$73.93b

11.0x

P/E Ratio

0.2x

P/S Ratio

Is ACI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ACI income statement (TTM)
Revenue	US$73.93b
Cost of Revenue	US$52.45b
Gross Profit	US$21.48b
Other Expenses	US$20.12b
Earnings	US$1.36b

Last Reported Earnings

Jun 18, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.55
Gross Margin	29.05%
Net Profit Margin	1.83%
Debt/Equity Ratio	157.0%

How did ACI perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

16%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is ACI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ACI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ACI. This is calculated by dividing ACI's market cap by their current preferred multiple.
What is ACI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$15.38b

ACI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	6.3x
PEG Ratio	3.9x

Price to Earnings Ratio vs Peers

How does ACI's PE Ratio compare to its peers?

ACI PE Ratio vs Peers

The above table shows the PE ratio for ACI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30.9x
CASY Casey's General Stores	22.8x	5.9%	US$7.8b
KR Kroger	15.7x	4.0%	US$33.8b
GO Grocery Outlet Holding	70.8x	22.0%	US$3.9b
SFM Sprouts Farmers Market	12.5x	2.0%	US$3.1b
ACI Albertsons Companies	11x	2.8%	US$14.9b

Price-To-Earnings vs Peers: ACI is good value based on its Price-To-Earnings Ratio (11x) compared to the peer average (30.5x).

Price to Earnings Ratio vs Industry

How does ACI's PE Ratio compare vs other companies in the US Consumer Retailing Industry?

Price-To-Earnings vs Industry: ACI is good value based on its Price-To-Earnings Ratio (11x) compared to the US Consumer Retailing industry average (18.8x)

Price to Earnings Ratio vs Fair Ratio

What is ACI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ACI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11x
Fair PE Ratio	16.8x

Price-To-Earnings vs Fair Ratio: ACI is good value based on its Price-To-Earnings Ratio (11x) compared to the estimated Fair Price-To-Earnings Ratio (16.8x).

Share Price vs Fair Value

What is the Fair Price of ACI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ACI ($28.07) is trading below our estimate of fair value ($58.42)

Significantly Below Fair Value: ACI is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Albertsons Companies forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACI's forecast earnings growth (2.8% per year) is above the savings rate (1.9%).

Earnings vs Market: ACI's earnings (2.8% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: ACI's earnings are forecast to grow, but not significantly.

Revenue vs Market: ACI's revenue (1.8% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: ACI's revenue (1.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ACI's Return on Equity is forecast to be high in 3 years time (29%)

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Past Performance

How has Albertsons Companies performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

48.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ACI has high quality earnings.

Growing Profit Margin: ACI's current net profit margins (1.8%) are higher than last year (0.8%).

Past Earnings Growth Analysis

Earnings Trend: ACI has become profitable over the past 5 years, growing earnings by 48.7% per year.

Accelerating Growth: ACI's earnings growth over the past year (143.8%) exceeds its 5-year average (48.7% per year).

Earnings vs Industry: ACI earnings growth over the past year (143.8%) exceeded the Consumer Retailing industry 16.4%.

Return on Equity

High ROE: Whilst ACI's Return on Equity (35.25%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Albertsons Companies's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ACI's short term assets ($8.7B) exceed its short term liabilities ($7.9B).

Long Term Liabilities: ACI's short term assets ($8.7B) do not cover its long term liabilities ($15.6B).

Debt to Equity History and Analysis

Debt Level: ACI's net debt to equity ratio (88.4%) is considered high.

Reducing Debt: ACI's debt to equity ratio has reduced from 958.4% to 157% over the past 5 years.

Debt Coverage: ACI's debt is well covered by operating cash flow (46.6%).

Interest Coverage: ACI's interest payments on its debt are well covered by EBIT (5.7x coverage).

Balance Sheet

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Dividend

What is Albertsons Companies's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.71%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ACI's dividend (1.71%) is higher than the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: ACI's dividend (1.71%) is low compared to the top 25% of dividend payers in the US market (4%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ACI has been paying a dividend for less than 10 years.

Growing Dividend: ACI's dividend payments have increased, but the company has only paid a dividend for 2 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (16.3%), ACI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (14.7%), ACI's dividend payments are thoroughly covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.6yrs

Average management tenure

CEO

Vivek Sankaran (59 yo)

3.33yrs

Tenure

US$8,639,520

Compensation

Mr. Vivek Sankaran has been the Chief Executive Officer and Director of Albertsons Companies, Inc. since April 25, 2019 and served as its President since April 25, 2019 until September 7, 2021. Mr. Sankara...

CEO Compensation Analysis

Compensation vs Market: Vivek's total compensation ($USD8.64M) is below average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Vivek's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: ACI's management team is considered experienced (3.6 years average tenure).

Board Members

Experienced Board: ACI's board of directors are considered experienced (3.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: ACI insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/18
Annual Earnings	2022/02/26