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

Zacks Equity Research

Altria (MO) closed the most recent trading day at $41.31, moving -0.24% from the previous trading session. This change lagged the S&P 500's 0.26% gain on the day. At the same time, the Dow added 0.13%, and the tech-heavy Nasdaq gained 0.4%.

Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 11.33% over the past month. This has lagged the Consumer Staples sector's gain of 1.1% and the S&P 500's gain of 3.92% in that time.

Investors will be hoping for strength from MO as it approaches its next earnings release. In that report, analysts expect MO to post earnings of $1.14 per share. This would mark year-over-year growth of 5.56%. Our most recent consensus estimate is calling for quarterly revenue of $5.29 billion, unchanged from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.18 per share and revenue of $19.71 billion, which would represent changes of +4.76% and +0.41%, respectively, from the prior year.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 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% higher within the past month. MO is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, MO is currently trading at a Forward P/E ratio of 9.92. Its industry sports an average Forward P/E of 10.97, so we one might conclude that MO is trading at a discount comparatively.

Meanwhile, MO's PEG ratio is currently 1.3. 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. The Tobacco industry currently had an average PEG ratio of 1.3 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 28, putting it in the top 11% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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