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Altria (MO) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Altria (MO) closed at $40.88, marking a +0.17% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.01%. Elsewhere, the Dow gained 0.06%, while the tech-heavy Nasdaq lost 0.06%.

Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 12.41% over the past month. This has lagged the Consumer Staples sector's gain of 0.13% and the S&P 500's gain of 3.23% in that time.

Wall Street will be looking for positivity from MO as it approaches its next earnings report date. On that day, MO is projected to report earnings of $1.14 per share, which would represent year-over-year growth of 5.56%. Meanwhile, our latest consensus estimate is calling for revenue of $5.29 billion, unchanged from the prior-year quarter.

MO's full-year Zacks Consensus Estimates are calling for earnings of $4.18 per share and revenue of $19.71 billion. These results would represent year-over-year changes of +4.76% and +0.41%, respectively.

Investors might also notice recent changes to analyst estimates for MO. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. MO is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, MO is holding a Forward P/E ratio of 9.77. Its industry sports an average Forward P/E of 11.02, so we one might conclude that MO is trading at a discount comparatively.

Meanwhile, MO's PEG ratio is currently 1.28. 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. Tobacco stocks are, on average, holding a PEG ratio of 1.28 based on yesterday's closing prices.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MO in the coming trading sessions, be sure to utilize Zacks.com.


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