RBC Capital lowered the firm’s price target on Albertsons (ACI) to $21 from $22 and keeps an Outperform rating on the shares. The ruling to block the Kroger’s (KR) merger was largely anticipated by investors, though the firm’s below consensus EBITDA estimate is being driven by expectations for a continued steady mix shift headwind from outsized pharmacy growth and a likely price investment, the analyst tells investors in a research note. Potential positive catalysts for Albertsons going forward include a large share repurchase commitment and/or a sale/leaseback with a tender announcement in an effort to reduce shareholder overhang, the firm added.
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