Altria Group Inc (MO)

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Altria (MO) Stock Sinks As Market Gains
By: Zacks Equity Research | April 16, 2019

Altria (MO) closed at $56.43 in the latest trading session, marking a -0.9% move from the prior day. This change lagged the S&P 500's 0.05% gain on the day. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, added 0.3%.

Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 0.63% over the past month. This has lagged the Consumer Staples sector's gain of 3.43% and the S&P 500's gain of 3.08% in that time.

Investors will be hoping for strength from MO as it approaches its next earnings release, which is expected to be April 25, 2019. The company is expected to report EPS of $0.92, down 3.16% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.53 billion, down 3.03% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.20 per share and revenue of $19.71 billion. These totals would mark changes of +5.26% and +0.44%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MO. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 0.19% lower. MO currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MO has a Forward P/E ratio of 13.55 right now. This represents a premium compared to its industry's average Forward P/E of 12.97.

Investors should also note that MO has a PEG ratio of 1.63 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 was holding an average PEG ratio of 1.79 at yesterday's closing price.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 38, putting it in the top 15% of all 250+ industries.

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