Value
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.6 |
| P/S | 10.0 |
| EV/EBITDA | 8.2 |
| Fwd P/E | 9.9 |
| PEG | 6.1 |
| Analyst target | 9.0 |
- ▸Forward P/E: 5.8x
- ▸PEG: 1.22
- ▸Attractively valued
ACI · Why this verdict
Why Albertsons Companies (ACI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A death cross with the moving average slope declining at approximately 2.6% per month, combined with falling on-balance volume, confirms the primary trend is negative — a configuration that is working against near-term buyers. Engine gate (failed) | The downtrend resolves when price crosses back above the 200-day moving average and on-balance volume turns higher for 2 consecutive months. | →Stable |
| CounterBollinger Band and support/resistance technical readings are in the top decile — the stock may be testing critical support at oversold levels, which historically creates mean-reversion setups even within a primary downtrend. | ||
Free cash flow is running at approximately 703% of net income, indicating the business generates far more operating cash than reported net income would suggest — a reflection of the capital structure and working capital dynamics of the grocery model. Quality breakdown | Strong cash generation continues to support the balance sheet, with free cash flow remaining above 300% of net income over the next 4 quarters. | →Stable |
| CounterA 703% FCF-to-net-income ratio implies net income is extremely thin relative to cash flows; even a modest compression in operating cash flows — from higher food costs, labor, or capex — could dramatically reduce the apparent cash generation advantage. | ||
At a forward P/E of 6 times and approximately 27% below analyst consensus, the stock screens as materially undervalued relative to its earnings capacity, offering a risk/reward ratio of approximately 8-to-1. Price targets | Price converges toward the $18.84 analyst target over 12 months as the downtrend resolves and the valuation gap closes. | →Stable |
| CounterGrocery retail is a thin-margin, low-return business with no identified competitive moat; the low multiple may reflect rational pricing for a commoditized operation, not a temporary discount awaiting re-rating. | ||
The company has beaten analyst estimates in all four recent quarters with an average surprise of approximately 7%, demonstrating consistent if modest execution against expectations. Earnings | The beat streak continues for at least 2 more quarters, sustaining the pattern of delivering modestly above guidance. | →Stable |
| CounterWith an average surprise of just 7%, the beat streak is narrow and could easily be disrupted by modest food cost inflation, wage increases, or volume deceleration — any of which could flip the pattern to a miss. | ||
A death cross with the moving average slope declining at approximately 2.6% per month, combined with falling on-balance volume, confirms the primary trend is negative — a configuration that is working against near-term buyers.
→StableEngine gate (failed)
- Expectation
- The downtrend resolves when price crosses back above the 200-day moving average and on-balance volume turns higher for 2 consecutive months.
CounterBollinger Band and support/resistance technical readings are in the top decile — the stock may be testing critical support at oversold levels, which historically creates mean-reversion setups even within a primary downtrend.
Free cash flow is running at approximately 703% of net income, indicating the business generates far more operating cash than reported net income would suggest — a reflection of the capital structure and working capital dynamics of the grocery model.
→StableQuality breakdown
- Expectation
- Strong cash generation continues to support the balance sheet, with free cash flow remaining above 300% of net income over the next 4 quarters.
CounterA 703% FCF-to-net-income ratio implies net income is extremely thin relative to cash flows; even a modest compression in operating cash flows — from higher food costs, labor, or capex — could dramatically reduce the apparent cash generation advantage.
At a forward P/E of 6 times and approximately 27% below analyst consensus, the stock screens as materially undervalued relative to its earnings capacity, offering a risk/reward ratio of approximately 8-to-1.
→StablePrice targets
- Expectation
- Price converges toward the $18.84 analyst target over 12 months as the downtrend resolves and the valuation gap closes.
CounterGrocery retail is a thin-margin, low-return business with no identified competitive moat; the low multiple may reflect rational pricing for a commoditized operation, not a temporary discount awaiting re-rating.
The company has beaten analyst estimates in all four recent quarters with an average surprise of approximately 7%, demonstrating consistent if modest execution against expectations.
→StableEarnings
- Expectation
- The beat streak continues for at least 2 more quarters, sustaining the pattern of delivering modestly above guidance.
CounterWith an average surprise of just 7%, the beat streak is narrow and could easily be disrupted by modest food cost inflation, wage increases, or volume deceleration — any of which could flip the pattern to a miss.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Albertsons trades at a forward P/E of 6 times with a favorable risk/reward of approximately 8-to-1, but a confirmed death cross and below-average business quality place the stock in a technically challenged position that warrants caution despite the compelling valuation discount.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.8 |
| ROA | 2.8 |
| Gross margin | 1.4 |
| Op margin | 0.7 |
| Net margin | 0.1 |
| Current ratio | 3.4 |
| FCF quality | 10.0 |
| Moat | 4.2 |
| Piotroski F | 5.6 |
- ▸Excellent cash conversion: 703% FCF/NI
- ▸No competitive moat
Growth
4.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
Momentum
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 4.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.2%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.5 |
| Analyst rating | 7.3 |
| Price target | 9.3 |
- ▸Analyst upside: 44%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $1,472,070 (0.021% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 2.9 |
| growth rank | 7.3 |
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.2 |
| support resistance | 7.0 |
| 52w position | 2.8 |
| gap | 5.0 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 3.1 |
| volatility | 3.1 |
| put call | 10.0 |
| implied vol | 3.0 |
| beta | 10.0 |
| debt equity | 0.0 |
- ▸High IV: 62%
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.9 |
| dividend safety | 5.2 |
| news activity | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 481.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- ASYMMETRY:3.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:18d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.8<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
3.93
Upside
+29.4%
Downside
7.5%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 36, MACD bearish
EdgeCatalyst-Driven — Earnings in 18d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.9 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:3.8<4.5.
The strongest dimensions are Value at 7.9, Sentiment at 7.3, and Catalyst at 6.3; the weakest are Quality at 3.4, Momentum at 3.8, and Insider at 3.9. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 3.93 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Cash Conversion
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P2Confirmed Technical Downtrend
Trip ifPrice closes above the 200-day moving average for 20 consecutive trading days and on-balance volume turns higher.
- P3Attractive Valuation Wide Upside
Trip ifPrice rises above $17.00, leaving less than 10% upside to the $18.84 target.
- P4Consistent Beats Narrow Margin
Trip ifEPS surprise falls below 0% for 2 consecutive reported quarters.