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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 $43.74, moving -1.15% from the previous trading session. This change lagged the S&P 500's 0.06% gain on the day. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.13%.

Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 7.58% over the past month. This has lagged the Consumer Staples sector's loss of 1.57% and the S&P 500's loss of 2.95% in that time.

Investors will be hoping for strength from MO as it approaches its next earnings release. The company is expected to report EPS of $1.14, up 5.56% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.29 billion, down 0.07% from the year-ago period.

MO's full-year Zacks Consensus Estimates are calling for earnings of $4.17 per share and revenue of $19.71 billion. These results would represent year-over-year changes of +4.51% and +0.42%, respectively.

It is also important to note the recent changes to analyst estimates for MO. 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.

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 0.13% lower within the past month. MO is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, MO currently has a Forward P/E ratio of 10.6. This valuation marks a discount compared to its industry's average Forward P/E of 10.78.

Investors should also note that MO has a PEG ratio of 1.39 right now. 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 1.39 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 30, putting it in the top 12% 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.

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


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