Albertsons: Fair Value and Ratings Unchanged as Susan Morris Set to Succeed Sankaran as CEO

We plan to maintain our $25 fair value estimate and Standard Capital Allocation Rating on no-moat Albertsons following the firm’s announcement that CEO Vivek Sankaran plans to retire in May 2025. While we look favorably upon Sankaran’s six-year tenure as CEO, the final two years proved tumultuous as he oversaw the pending merger with no-moat Kroger, which was ultimately terminated in December 2024. While the nixed merger offers clarity to the nation’s second-largest supermarket chain, we acknowledge that Sankaran’s planned departure comes at a time in which the firm continues to face stringent competitive pressure from low-price peers such as wide-moat Walmart and wide-moat Costco.