$ACI earnings pps are good.P/E multiple of ~17x to our adjusted 2021 EPS estimate of $1.53."
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$ACI Albertsons initiated with an Outperform at Telsey Advisory Group; tgt $26
10:18 AM ET 7/21/20 | Briefing.com
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12:56 PM ET 7/21/20
Symbol Last % Chg
ACI
15.72 0.80%
Real time quote.
. Telsey Advisory Group initiates ACI with an Outperform and price target of $26.
Analyst Joseph Feldman said, "Albertsons is in the early stages of a transformation that should drive market share gains, earnings growth, and free cash flow for multiple years.
This, combined with the current attractive valuation, offers an opportunity for ACI shares to Outperform.
Albertsons should continue to benefit from the structural shift in consumer shopping behavior toward digital, increased at-home consumption, and ongoing consolidation.
Sustainable growth also should be driven by transformative initiatives, like enhanced merchandising,
renewed focus on loyalty, and new digital and omni-channel capabilities. The plan to leverage data analytics and alternative businesses should provide further upside.
These actions are likely to make Albertsons long-term targets-ID sales of 2.25%, EBITDA growth of 3%-5%, lower interest expense,
EPS growth of HSD, and total shareholder return (TSR) of double-digits-prove conservative.
Importantly, Albertsons has improved its balance sheet, with a reduced leverage ratio, and should generate solid free cash flow.
Albertsons, in our view, deserve a higher valuation, more like Kroger and other food retailers, given its transformation and stable outlook.
As such, our 12-month price target of $26 is based on applying an EV/EBITDA multiple of ~7x to our adjusted 2021 EBITDA of $3.2B.
This implies a P/E multiple of ~17x to our adjusted 2021 EPS estimate of $1.53."
