Last week saw the newest quarterly earnings release from Albertsons Companies, Inc. (NYSE:ACI), an important milestone in the company's journey to build a stronger business. Statutory earnings per share fell badly short of expectations, coming in at US$0.17, some 59% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$25b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, Albertsons Companies' 17 analysts currently expect revenues in 2027 to be US$81.9b, approximately in line with the last 12 months. Per-share earnings are expected to jump 757% to US$1.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$82.5b and earnings per share (EPS) of US$1.84 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target fell 28% to US$14.50, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Albertsons Companies at US$24.00 per share, while the most bearish prices it at US$10.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.1% by the end of 2027. This indicates a significant reduction from annual growth of 3.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Albertsons Companies is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Albertsons Companies. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Albertsons Companies' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Albertsons Companies' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Albertsons Companies. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Albertsons Companies analysts - going out to 2029, and you can see them free on our platform here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.