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

Zacks Equity Research

Altria (MO) closed at $51.09 in the latest trading session, marking a -0.31% move from the prior day. This change lagged the S&P 500's daily gain of 0.84%. Meanwhile, the Dow gained 0.92%, and the Nasdaq, a tech-heavy index, added 1.06%.

Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 0.21% over the past month. This has lagged the Consumer Staples sector's gain of 2.75% and the S&P 500's gain of 3.95% in that time.

MO will be looking to display strength as it nears its next earnings release, which is expected to be January 30, 2020. On that day, MO is projected to report earnings of $1.01 per share, which would represent year-over-year growth of 6.32%. Meanwhile, our latest consensus estimate is calling for revenue of $4.85 billion, up 1.36% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for MO. Recent revisions tend to reflect the latest near-term business trends. 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% lower. 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 11.63. This valuation marks a discount compared to its industry's average Forward P/E of 11.99.

It is also worth noting that MO currently has a PEG ratio of 1.82. 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 1.82 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 113, which puts it in the top 45% 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.

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


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