Albertsons (ACI) near-term earnings estimates could face downside risk as the grocery retailer grapples with leadership changes, aggressive price investments, weak demand from lower-income consumers, declining unit volumes and supplier cost inflation, Morgan Stanley said in a note Friday.

The Wall Street firm lowered its price target to $10 from $14 and maintained its underweight rating, citing continued margin pressure and rising competitive intensity.

Morgan Stanley said it remains cautious about the benefits of Albertsons' longer-term initiatives, noting that slowing grocery and e-commerce trends could weigh on profitability.

While Albertsons' free cash flow is expected to remain positive even under a downside scenario, Morgan Stanley said it believes cash generation alone is unlikely to support the stock's valuation if operating profits continue to deteriorate.