Altria’s Stock Performance: Mixed Signals Amid Market Trends
Altria Group, Inc. (MO), based in Richmond, Virginia, produces and sells smokeable and oral tobacco products. With a market valuation of $91.6 billion, the company is known for cigarettes primarily under the Marlboro brand, and it also offers cigars and pipe tobacco through brands like Black & Mild, along with smokeless tobacco and snus products under names such as Copenhagen, Skoal, Red Seal, and Husky.
Yearly Performance Review
Over the past year, Altria’s stock has lagged behind the broader market. While MO’s shares have risen by 34.5%, the S&P 500 Index ($SPX) has seen a more impressive increase of approximately 36.8%. However, in 2024, MO has posted a 34% gain, outpacing the SPX’s 25.7% rise year to date (YTD).
Comparison with Consumer Staples
A closer examination shows that MO’s performance stands out against the Consumer Staples Select Sector SPDR Fund (XLP), which has increased by around 17.5% in the last year. On a YTD basis, MO’s gains again surpass the ETF’s returns of 12.2%.
Declining Cigarette Sales
Altria is navigating through difficulties with traditional cigarette sales in the U.S., facing declining shipment volumes due to a drop in smoking rates that began in the mid-1960s. In the third quarter (Q3), the volume of smokeable products sold fell by 8.4% compared to the previous year, highlighting the trend of reduced cigarette consumption.
Q3 Financial Results
On October 31, MO shares jumped more than 7% following the announcement of its Q3 results. The company reported an adjusted earnings per share (EPS) of $1.38, surpassing Wall Street’s projection of $1.36. Revenue reached $6.3 billion, a slight decline year over year. Altria anticipates full-year adjusted EPS will range from $5.07 to $5.15.
Analyst Expectations
For the fiscal year ending in December, analysts predict an EPS growth of 3.2%, bringing the anticipated diluted EPS to $5.11. Altria’s earnings surprise history reflects variability, with the company exceeding estimates in two of the last four quarters, while falling short in the others.
Analyst Ratings Overview
Out of ten analysts monitoring MO stock, the consensus rating is a “Hold”, featuring three “Strong Buy”, five “Hold”, and two “Strong Sell” recommendations. This rating is a shift from two months ago when four analysts recommended a “Strong Buy.”
On November 6, Gaurav Jain, an analyst at Barclays PLC (BCS), maintained an “Underweight” rating for Altria while raising its price target to $46. Even though MO is trading above the average target of $52.50, the highest price target of $60 indicates an upside potential of 11%.
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On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
