Albertsons (ACI) reported disappointing fiscal Q1 results amid weaker grocery sales and slowing pharmacy growth, RBC Capital Markets said Friday in a report.
Core grocery sales likely will continue to decline, while pharmacy growth is expected to slow as Medicare coverage extends to some GLP-1 therapies and additional drugs enter the federal price-negotiation program in January, triggering required discounts and lower reimbursement over time, the report said.
RBC reduced its estimates for identical-store sales in Q2 and fiscal years 2026 and 2027 and lowered its forecast for Q2 adjusted earnings before interest, taxes, depreciation and amortization to $766 million from $850 million.
"While the path forward remains murky, we believe Albertsons shares look very cheap and we'd argue the risk to reward skews significantly positive," the report said.
RBC cut its price target on Albertsons stock to $13 from $20 and maintained its outperform rating.
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