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

Zacks Equity Research
AK Steel (AKS) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Altria (MO) closed at $50.11 in the latest trading session, marking a -1.47% move from the prior day. This change lagged the S&P 500's 0.97% gain on the day. At the same time, the Dow added 1.35%, and the tech-heavy Nasdaq gained 1.39%.

Heading into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 2.81% over the past month, lagging the Consumer Staples sector's gain of 1.05% and the S&P 500's gain of 0.64% 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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.18 per share and revenue of $19.65 billion. These totals would mark changes of +4.76% and +0.14%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MO. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 0.05% higher. MO is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that MO has a Forward P/E ratio of 12.18 right now. This represents a discount compared to its industry's average Forward P/E of 12.39.

Also, we should mention that MO has a PEG ratio of 1.59. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Tobacco stocks are, on average, holding a PEG ratio of 1.59 based on yesterday's closing prices.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 222, putting it in the bottom 14% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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