Albertsons Companies, Inc. (ACI): what the price requires
The current priced-in claim for Albertsons Companies, Inc. (ACI) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ACI
Headline
| Field | Value |
|---|---|
| Ticker | ACI |
| Company | Albertsons Companies, Inc. |
| Current price | $14.73/sh |
| Composition | Non-perishables 49% / Fresh 31% / Pharmacy 14% / Fuel 5% / Other 2% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 2.1% |
| Multiple paid | 13x operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 6% cost of capital with 4% terminal growth over a 5-year stage (computed at the 6% minimum rate; the CAPM rate 4.7% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~4.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.15σ |
| cohort percentile (of 69 peers) | 28 |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.94x | 4 | expensive |
| Earnings | 2.09x | 2 | expensive |
| Relative | 1.65x | 3 | expensive |
| Growth | 1.25x | 2 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.8%); the inversion above states its own rate.
Per-Model Detail (n=11)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $13.15 | 1.12x | yes | Exit EV/EBITDA: 15.3x / 17.3x / 19.3x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $8.92 | 1.65x | yes | P/E 26.27x (blended: static sector reference 22x + trailing (TTM) 36x), scenarios: 22.0x / 26.3x / 30.5x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $-0.15 | — | no | Stage 1: -132% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $4.40 | 3.35x | yes | BV/sh $3.43, ROE (TTM) 11.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $4.95 | 2.97x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $10.71 | 1.37x | yes | Rev $83.2B, growth 4% (input: historical growth; tapered), Terminal P/S: 0.1x / 0.1x / 0.1x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $19.11 | 0.77x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.82B × (1−21%) / WACC 5.8% → EPV (no growth) |
| Residual Income | Asset | $5.06 | 2.91x | yes | BV $3.43 + 5yr PV of (ROE (TTM) 11.8% − Kₑ 9.3%) × BV; BV grows 7.7%/yr |
| Graham Number | Asset | $5.56 | 2.65x | yes | √(22.5 × EPS $0.40 × BVPS $3.43) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $6.81 | 2.16x | yes | EBITDA $1.30B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $0.01 | 1472.50x | yes | FCF $527.3M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 1472.50x | yes | SBC-adj FCF $0.43B (FCF $0.53B − SBC $0.10B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $0.34 | 43.31x | yes | EPS $0.40 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $294.50 | 0.05x | yes | Revenue $83.17B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $4.32 | 3.41x | yes | EPS $0.40 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $8.7b |
| Net debt / NOPAT (after-tax) | 6.32x |
| Net debt / operating income (pre-tax) | 4.99x |
| Share count CAGR (buyback) | -1.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Albertsons is a grocery operator trying to become a higher-margin data and pharmacy business inside the same stores: digital sales grew 21% in fiscal 2025 and the company keeps investing in its retail-media arm, the Albertsons Media Collective, which it builds to "accelerate growth" off its loyalty data.
- The defining risk is the debt: net debt of about $8.75 billion is roughly 12 times operating income, and on a razor-thin operating margin near 0.9%, even small declines in identical sales swing what is left for shareholders.
- Watch fiscal 2026 guidance, identical sales of 0% to 1% and adjusted EBITDA of $3.85 billion to $3.925 billion, alongside the pace of the $2 billion buyback the company just reset, because the equity story depends on margin mix shifting toward pharmacy and media faster than core grocery margins erode.
Bull Case
Begin with where the price sits against the methods, because it tells you what kind of bet this is. Across the valuation families, the asset, earnings-power, and peer-multiple lenses all read Albertsons as fully or richly priced; the only family that reaches today's price is the one that credits forward compounding. That is the signature of a moat-or-durability premium: the market is not paying for the grocery business as it looks in a static snapshot, it is paying for the business it is becoming. The bull case is that the transformation is real and the static methods simply cannot see it yet.
The substance of that transformation is margin mix. A traditional supermarket earns pennies on the dollar, and Albertsons runs at an operating margin near 0.9%, so the path to a better business is not selling more groceries at the same thin spread, it is layering high-margin revenue on top of the same store traffic. Two levers do that. Pharmacy and health services pull a different margin and a stickier customer, and the retail-media arm sells advertising against the company's own shopper data: the filing describes ongoing significant investment to "enrich our data to accelerate growth in the Albertsons Media Collective" and to "expand the reach of our brand." Digital sales grew 21% in fiscal 2025, which is the engine that feeds both the media data and the loyalty program. Each incremental advertising or pharmacy dollar drops through at a far higher rate than a dollar of canned goods.
The third leg is capital return discipline funded by real cash. Albertsons generated free cash flow in the hundreds of millions over the trailing year, raised its dividend by 13%, and reset a $2 billion buyback, and the share count has been shrinking, down about 1.8% a year. For a company this leveraged, a falling share count is the cleanest evidence that the cash flow is genuine and that management would rather retire equity than chase growth it cannot fund. The bull case rests on the arithmetic of that mix shift: if pharmacy and media keep growing 20-percent-class while the buyback retires shares against a thin float of profit, the per-share economics improve faster than the headline grocery margin suggests, and the growth-leaning value the price already reflects gets earned rather than hoped for.
Bear Case
The bear case is competitive, and it has a name: the mass and online retailers eating share at both ends of the grocery basket. Albertsons states the problem plainly, that "an increasingly competitive industry and inflation and deflation in the prices of certain foods have made it difficult for food retailers to achieve positive identical sales growth on a consistent" basis, and that as consumers shift online it faces "increasing competition from both our existing competitors" that have built out delivery. The structural pressure is that the lowest-cost operator sets the price of a gallon of milk, and a supermarket chain with a 0.9% operating margin has almost no room to match a deep-pocketed discounter on price without erasing its own profit. The same digital growth the bull cites is partly defensive: building delivery and loyalty costs money and is increasingly the price of staying in the game rather than a source of new margin.
The leverage turns that competitive squeeze into an equity problem. Net debt of about $8.75 billion is roughly 12 times operating income, with gross debt near $8.95 billion, and the company carries a stack of senior notes and finance leases it must service regardless of how the price war goes. Interest coverage is not separately disclosed in the latest filings, which removes a comfort check, but the math is unforgiving: with operating income near $727.6 million sitting beneath that debt load, a few points of identical-sales softness or margin compression flows straight to the thin equity slice underneath. The dividend increase and the buyback are paid out of the same cash flow that services the debt, so capital return and balance-sheet repair compete for the same dollars.
The valuation completes the bear. On the static methods, the price already sits well above where assets, normalized earnings power, and peer multiples land; only a forward-compounding assumption reaches it. That means the buyer at today's price is paying in advance for the mix shift to pharmacy and media to work, in a business whose core is structurally low-margin and under price pressure from larger competitors. If identical sales stay near flat and the high-margin levers grow but do not grow fast enough to re-rate the blended margin, the durable-compounding premium the price embeds simply does not get earned, and a leveraged, thin-margin grocer reverts toward where the value methods, not the growth method, say it belongs.
Valuation
The cleanest way to read Albertsons is that two different lenses point in opposite directions, and the gap between them is the whole story. Inverted on company-wide operating income, the price looks undemanding: at $13.46 (June 27, 2026) the market is paying roughly 13 times operating income, a multiple low enough that it sits below what even a steady 5%-a-year decline in operating profit would warrant. By that bound, the price asks almost nothing of the future. But that lens treats a multi-segment grocer as one blended margin, which is the wrong frame for a business that is part fresh food, part non-perishables, part pharmacy, part fuel.
The family of valuation methods tells the other half. Group them and only one reaches the price. The asset-value methods anchor on a book value of about $3.43 a share and land far below today's price. The earnings-power and peer-multiple methods, working off thin trailing profitability, also sit below the price. The single family that reaches $13.46 is the forward-growth lens, and it gets there only by crediting the business with durable compounding the static methods structurally cannot price. So the static picture says richly valued and the forward picture says fairly valued, and both are true on their own terms: the trailing lenses see a thin-margin grocer, the forward lens sees the pharmacy-and-media mix shift that has not fully arrived. A reader who divides a static method's output into the price and a reader who reads the growth method are looking at different businesses on different bases.
Solvency decides how much benefit of the doubt the forward lens deserves. Net debt of about $8.75 billion against operating income near $727.6 million is roughly 12 times on a pre-tax basis, the company is not burning cash and is buying back stock, but the equity is a thin layer over a large fixed obligation. That is why the same name can look cheap on an operating-income bound and rich on the static methods at once: the operating income exists and is being paid out, but the debt sits ahead of the shareholder, so the value that reaches the equity depends entirely on the margin mix improving rather than the core grocery margin, which has nowhere lower to fall and limited room to rise.
Catalysts
The set-piece event is fiscal 2026 guidance, which frames the year as flat-to-slightly-up volume with margin doing the work. Albertsons guided identical sales of 0% to 1% (or 1.5% to 2.5% excluding an estimated roughly 150 basis points of headwind tied to reduced healthcare subsidies), adjusted EBITDA of $3.85 billion to $3.925 billion, and adjusted EPS of $2.22 to $2.32, the EPS figure assuming about $600 million of share repurchases. The capital-return signal was loud: the company raised its dividend by 13% and reset a $2 billion buyback, which it would not do if management lacked confidence in forward cash flow.
The operating catalysts that decide whether the guide holds are digital and pharmacy. Digital sales grew 21% for the full fiscal 2025 year, and analysts have pointed to improved results supported by digital and pharmacy growth as the basis for steadier fair-value estimates. Those are the levers that carry the high-margin mix shift the equity story depends on, so each quarterly print is a read on whether the media and pharmacy engines are scaling fast enough to offset thin core grocery margins.
Sentiment is constructive but cooling at the edges. The consensus rating leans Buy with a mean target above the current price, yet several firms have trimmed their targets recently, reflecting caution on brick-and-mortar grocery economics. The most recent quarter showed the pattern that defines the name: an earnings and EBITDA beat alongside a revenue miss, which is the company doing better on margin and capital discipline than on top-line growth, exactly the tension the valuation hinges on.
Peer Cohorts (Per Segment, With Filing Citations)
Retail (reported)
- KR (KROGER CO)
- (no filing in the citation store)
- SFM (Sprouts Farmers Market, Inc.)
- (no filing in the citation store)
- WMK (WEIS MARKETS, INC)
- (no filing in the citation store)
- WMT (WALMART INC.)
- (no filing in the citation store)
- BJ (BJ’S WHOLESALE CLUB HOLDINGS, INC.)
- (no filing in the citation store)
- COST (COSTCO WHOLESALE CORP /NEW)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
company FY2026 guidance, 2026 · company announcement, 2026 · analyst commentary, 2026 · analyst consensus, 2026