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Altria (MO) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
First Busey (BUSE) delivered earnings and revenue surprises of 1.92% and -1.31%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

Altria (MO) closed at $51.61 in the latest trading session, marking a -1.04% move from the prior day. This change lagged the S&P 500's 0.2% loss on the day. At the same time, the Dow lost 0.17%, and the tech-heavy Nasdaq lost 0.38%.

Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had gained 0.5% over the past month. This has lagged the Consumer Staples sector's gain of 1.91% and outpaced the S&P 500's gain of 0.33% in that time.

Wall Street will be looking for positivity from MO as it approaches its next earnings report date. The company is expected to report EPS of $1.09, up 7.92% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.05 billion, up 3.6% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.17 per share and revenue of $19.65 billion, which would represent changes of +4.51% and +0.14%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MO. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. MO is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MO's current valuation metrics, including its Forward P/E ratio of 12.49. Its industry sports an average Forward P/E of 12.83, so we one might conclude that MO is trading at a discount comparatively.

Meanwhile, MO's PEG ratio is currently 1.63. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MO's industry had an average PEG ratio of 1.63 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 224, putting it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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