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Altria (MO) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Altria (MO) closed at $46.75, marking a +0.88% move from the previous day. This change outpaced the S&P 500's 0.29% gain on the day. Meanwhile, the Dow gained 0.17%, and the Nasdaq, a tech-heavy index, added 0.19%.

Heading into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had gained 13.77% over the past month, outpacing the Consumer Staples sector's loss of 0.31% and the S&P 500's gain of 0.32% in that time.

Investors will be hoping for strength from MO as it approaches its next earnings release, which is expected to be October 31, 2019. On that day, MO is projected to report earnings of $1.14 per share, which would represent year-over-year growth of 5.56%. Our most recent consensus estimate is calling for quarterly revenue of $5.28 billion, down 0.22% from the year-ago period.

MO's full-year Zacks Consensus Estimates are calling for earnings of $4.19 per share and revenue of $19.72 billion. These results would represent year-over-year changes of +5.01% and +0.48%, respectively.

Any recent changes to analyst estimates for MO should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.55% higher. MO is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, MO is currently trading at a Forward P/E ratio of 11.06. This represents a discount compared to its industry's average Forward P/E of 11.42.

Investors should also note that MO has a PEG ratio of 1.73 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Tobacco industry currently had an average PEG ratio of 1.73 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 183, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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