Albertsons (ACI) is making tangible progress on margins, but its top-line outlook remains muted, RBC Capital Markets said in a note Tuesday.

Analysts said management's soft guidance is primarily related to the pharmacy business since grocery trends have largely remained stable. The brokerage subsequently lowered its fiscal Q1 and fiscal 2026 ID sales estimates.

RBC said a key positive from the company's fiscal Q4 earnings report was an increase in its productivity savings target to $2 billion over the next three years from $1.5 billion.

Analysts said Albertsons' customer lifetime value will likely increase over time as it converts pharmacy customers to grocery customers.

The brokerage added that sales could deteriorate if inflation eases and retailers don't see an equal lift in volumes.

RBC Capital Markets retained an outperform rating on the stock, but lowered its price target to $20 from $21.

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