Analyst Note
| Zain Akbari, CFA |Our $28.50 fair value estimate for no-moat Albertsons should not change much after the firm announced full-year earnings that exceeded our expectations but offered somewhat underwhelming fiscal 2022 guidance. With the fiscal 2022 discrepancy likely a result of transitory phenomena (pandemic, inflation), our 10-year forecast for low-single-digit average annual sales growth and operating margins is intact. Although our reaction is more tempered than the shares’ high-single-digit percentage swoon after the news (likely on account of our somewhat more muted expectations for fiscal 2021 and 2022), we suggest investors await a more attractive entry point.