Albertsons' (ACI) fiscal Q2 results are expected to come in "modestly" below consensus, although the company's reduced fiscal 2026 guidance appears to capture much of the downside risk, RBC Capital Markets said in a note emailed Wednesday.
The investment firm forecasts fiscal Q2 identical sales to be down 1% and adjusted EBITDA to decline 10% year over year to $761 million, compared with consensus of a 0.9% decline and $770 million respectively, reflecting continued pressure in core grocery and slower pharmacy growth, according to the note.
RBC said earnings downside appears limited unless Albertsons increases price investment, while the setup into the earnings report looks interesting at about 4.3 times its fiscal 2027 adjusted earnings before interest, taxes, depreciation and amortization estimate.
The firm said it expects management to reaffirm fiscal 2026 guidance, while noting that the appointment of Meg Whitman as executive chair could increase the likelihood of strategic change at the company.
Albertsons is set to report fiscal Q2 financial results on Oct. 13.
RBC Capital Markets has an outperform rating on Albertsons, with a price target of $13.
Albertsons shares were up 1.9% in Wednesday trading.
Price: 11.70, Change: +0.22, Percent Change: +1.92