Altria Group Reports Strong Earnings Amid Market Outperformance
Altria Group, Inc. (MO), based in Richmond, Virginia, is a major player in the tobacco industry, manufacturing and selling various smokeable and oral tobacco products. With a market capitalization of $100.4 billion, the company primarily offers cigarettes under the Marlboro brand, large cigars and pipe tobacco under the Black & Mild brand, as well as moist smokeless tobacco and snus products marketed as Copenhagen, Skoal, Red Seal, and Husky, among others.
Impressive Stock Performance
In the past year, Altria’s stock has outperformed the broader market. Specifically, MO shares have increased by 35.5%, in contrast to the S&P 500 Index ($SPX), which has risen nearly 12.3%. Year-to-date (YTD), MO continues to show strength with a 14% increase, while the SPX has seen a decline of 3.3%.
Comparison with Consumer Staples
Further examining the data, MO’s impressive performance is noteworthy when compared to the Consumer Staples Select Sector SPDR Fund (XLP), which has reported a gain of approximately 7.8% over the past year. MO’s YTD returns also exceed the ETF’s 3.8% returns during the same timeframe.
Growth in Vaping Business
Growth in Altria’s Njoy vaping segment and consumable shipments has been a significant contributor to its strong performance.
Recent Q1 Earnings Report
On April 29, Altria’s shares rose by 1% following its Q1 earnings report. The company posted an adjusted earnings per share (EPS) of $1.23, exceeding Wall Street’s expectations of $1.17. However, with adjusted revenue reported at $4.5 billion, it fell short of analysts’ forecasts of $4.6 billion. For the full year, Altria anticipates adjusted EPS to be between $5.30 and $5.45.
Analysts’ Expectations for 2023
For the fiscal year ending in December, analysts project Altria’s EPS to grow by 5.3% to reach $5.39 on a diluted basis. Over the last four quarters, the company’s earnings surprise history has been mixed: it has beaten consensus estimates three times, but missed one forecast.
Analyst Ratings Overview
Among 11 analysts covering Altria, the consensus rating is a “Hold.” This is based on three “Strong Buy” ratings, six “Holds,” and two “Strong Sells.” The current outlook reflects a shift from two months ago when four analysts had rated it as a “Strong Buy.”
Price Targets
On May 2, Barclays PLC (BCS) maintained an “Underweight” rating on Altria while increasing the price target to $49. Although MO shares currently trade above the average price target of $56.11, the highest target of $63 implies a potential upside of 5.7%.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein belong to the author and do not necessarily reflect those of Nasdaq, Inc.
