Why BMO Capital Upgraded ACI to Outperform
On May 7, 2025, BMO Capital Markets upgraded Albertsons Companies Inc. (NYSE: ACI) from “Market Perform” to “Outperform” and raised its price target from \$19 to \$25, reflecting a 14% upside from the previous close. This upgrade follows a period of underperformance due to a weaker-than-expected 2025 profit outlook.
💼 BMO analyst Kelly Bania emphasized that Albertsons is well-positioned for valuation expansion as investors rotate toward affordable, defensive names in a volatile 2025 market environment. Margins have stabilized close to pre-pandemic levels, with expectations already pricing in modest growth, creating a setup for upside surprise.
🛍️ The grocery sector as a whole is regaining favor among institutional investors, with Albertsons standing out due to its operational efficiency, loyalty programs, and a strong omnichannel presence. These factors reinforce the thesis that the company can hold or improve margins even in a tighter consumer spending cycle.
💡 Investors are increasingly viewing Albertsons as a safe haven with consistent cash flow generation, making it an appealing defensive play as economic uncertainty lingers.
Dividend Fundamentals
💰 Annual Dividend: \$0.60 per share
📊 Dividend Yield: Approximately 2.75%
📉 Payout Ratio: Around 36.6%
📈 Dividend Growth: 12.5% year-over-year
🏦 Albertsons continues to demonstrate strong capital discipline, balancing reinvestment with shareholder returns. The current payout ratio offers room for sustainable growth without compromising financial flexibility. This dividend profile, combined with the recent analyst upgrade, positions Albertsons as a compelling mix of value and income.