12 Most Undervalued Retail Stocks To Buy According to Analysts

7. Albertsons Companies, Inc. (NYSE:ACI)

Forward P/E: 8.33

Analyst Upside: 27.12%

Albertsons Companies, Inc. (NYSE:ACI) is a US-based food and drug retailer offering general merchandise, grocery items, health and beauty care products, fuel, pharmacy, and other items and services through its digital channels and stores. It has over 2,269 stores across 34 states and the District of Columbia under 20 banners, including Star Market, Shaw’s, Albertsons, Kings Food Markets, United Supermarkets, Haggen, Kings Food Markets,  Acme, Carrs, and more. It also operates around 1,725 pharmacies, 1,336 in-store branded coffee shops, 22 distribution centers, 402 adjacent fuel centers, 19 manufacturing facilities, and various digital platforms.

The company has a strong operational model in place. Its Customers for Life strategy is working, driving strong growth in digital sales and pharmacy operations in the second quarter of fiscal 2024. The initiatives also allowed it to drive strong year-over-year growth in its loyalty members and omnichannel shoppers, along with accelerated growth in Albertsons Media Collective. Net sales and other revenue for the second quarter of fiscal 2024 reached $18.6 billion compared to $18.3 million for the second quarter of fiscal 2023. This growth was attributed to a 2.5% increase in the company’s identical sales, while solid growth in pharmacy sales drove growth in identical sales.

Albertsons (NYSE:ACI) also grew its digital sales by 24% during the second quarter of fiscal 2024. However, the increase in net sales and other revenue was partially offset by relatively lower fuel sales. In addition to this, other headwinds are likely to affect the company, including those related to investments in associate wages and benefits, an increasingly competitive backdrop, and an increasing mix of its digital businesses and pharmacy, which carry lower margins. However, it has ongoing and new productivity plans in place to partially offset the effects of these headwinds. Albertsons (NYSE:ACI) takes the fifth spot on our list of the 12 most undervalued retail stocks to buy according to analysts.