Albertsons (ACI, Financials) just got a vote of confidence from BMO Capital. The firm upgraded the grocery chain to Outperform and bumped its price target to $25 a share, saying it expects investors to start seeking out steady, lower-risk stocks in the second half of the year.

BMO's pitch is simple: Albertsons looks cheap next to its peers, and the setup going into the back half of 2025 seems favorable. Margins are almost back to pre-pandemic levels, earnings expectations are already low, and the threat of aggressive price-cutting across the industry isn't as strong as usual. Tariff-related cost pressures are forcing bigger retailers to hold back.

The company's management has been clear that 2025 is an investment year — and BMO thinks the market has already priced that in. On top of that, Albertsons has made progress cleaning up its balance sheet, cutting its unfunded pension liability to $3.6 billion from $4.9 billion in just a year.

Still, it's not all roses. The analysts say Albertsons is trailing Kroger (KR, Financials) when it comes to digital operations and process centralization — areas that matter in a cost-sensitive business. But even with those gaps, BMO sees room for the stock to move higher. At 12x projected fiscal 2027 EPS of $2.07, the $25 price target reflects what they see as a fairer valuation for a company that's still flying under the radar.