Melius upgrades Albertsons to Buy, sees ‘multiple ways to win’

As previously reported, Melius Research upgraded Albertsons (ACI) to Buy from Hold with a $24 price target, citing the view that it is “clear” that the market is not appropriately valuing Albertsons and factoring how strong the management team is, “when and if they can finally communicate more broadly with investors.” The firm believes the merger with Kroger (KR) will “remain challenged to go through,” but notes that in the event it does, Albertsons shareholders will receive $27.25 per share, equating to 43% upside. Assuming no merger, the firm examined three valuation approaches and applying the valuation at which the stock historically trades to the firm’s 2026 estimates results in $24 per share. Analyzing the company’s real estate in a liquidation analysis implies $18 per share, which undervalues certain components and the firm would consider this “the floor ACI valuation,” the analyst tells investors.