We came across a bullish thesis on Albertsons Companies, Inc. on Value investing subreddit by staniel_andy. In this article, we will summarize the bulls’ thesis on ACI. Albertsons Companies, Inc.’s share was trading at $17.35 as of October 2nd. ACI’s trailing and forward P/E were 10.58 and 8.26 respectively according to Yahoo Finance.
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Albertsons Companies, Inc. (ACI) presents a compelling defensive investment opportunity in an expensive market, currently trading at $17.35, below 11x 2024 earnings and with an EV/Sales of 0.2, making it attractively valued relative to peers like Kroger and Weis, which trade at P/E multiples of 17 and EV/Sales of 0.4 and 0.3, respectively. The company benefits from multiple catalysts that could unlock significant upside.
Kroger’s failed acquisition of Albertsons triggered a potential $600 million breakup fee, equating to roughly 6% of ACI’s stock price, providing immediate value to shareholders. Additionally, Albertsons has an authorized share repurchase program of up to $2 billion, around 20% of outstanding shares, and the company has already repurchased 14.2 million shares at $22 for $314.8 million, with the potential to accelerate repurchases at current lower prices, further boosting earnings per share.
The 2024 earnings decline to $1.64 from $2.23 in 2023 reflects one-time costs from the failed merger rather than fundamental weakness, suggesting normalized earnings could support a fair value of $28–$30 per share, over 60% upside, assuming a P/E of 17 or EV/Sales of 0.3 based on peers.
Additional upside could come from Kroger’s breakup fee, further share repurchases reducing outstanding stock, operational leverage now that merger-related costs are behind them, and potential strategic interest, as Goldman Sachs identified Albertsons as a top 48 M&A candidate with a 15–30% probability. These factors combine to make Albertsons an undervalued, cash-generative, and defensive play with multiple levers for significant shareholder returns.
Previously we covered a bullish thesis on Target Corporation (TGT) by LongYield in May 2025, which highlighted the company’s digital momentum, cost control, omnichannel capabilities, and strong capital deployment despite near-term sales and EPS weakness. The company’s stock price has depreciated approximately by 5.06% since our coverage. The thesis still stands as Target’s strategic investments support long-term recovery. Staniel_andy shares a similar approach but emphasizes Albertsons’ undervaluation, defensive positioning, and potential upside from M&A catalysts.