Altria Group Inc (MO)

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Earnings Preview: Altria Group Inc. (NYSE: MO)
By: 24/7 Wall St. | October 25, 2022

• Here is a look at four companies set to report results first thing Thursday morning.

Altria

The maker and U.S. distributor of Marlboro cigarettes, Altria Group Inc. (NYSE: MO), has suffered an uncharacteristic share price decline of more than 5% over the past 12 months. The company said in July that its investment in e-cigarette maker Juul had vaporized 95% of a $13 billion investment. On Monday, the company ended its U.S. commercialization agreement with Philip Morris. The international maker and distributor of Marlboro cigarettes will pay Altria $3.7 billion for the right to commercialize the IQOS heat-not-burn device in the United States.

Sentiment on the company is positive but not strong. Of 18 analysts covering the shares, 11 have a Hold rating, while another six rate the shares at Buy or Strong Buy. At a recent price of around $45.40 a share, the implied gain based on a median price target of $50.50 is 10.1%. At the high price target of $68.00, the upside potential is about 50%.

Third-quarter revenue is forecast at $5.59 billion, which would be up 3.9% sequentially and by 1.0% year over year. Adjusted EPS are forecast to come in at $1.30, down 0.2% sequentially but up 6.6% year over year. For the full 2022 fiscal year, Altria is expected to report EPS of $4.84, up about 5%, on sales of $20.9 billion, down about 1%.

Altria stock trades at about 9.4 times expected 2022 EPS, 9.1 times estimated 2023 earnings of $5.03 and 8.7 times estimated 2024 earnings of $5.26 per share. The stock’s 52-week trading range is $40.35to $57.05, and Altria pays an annual dividend of $3.76 (yield of 8.28%). Total shareholder return over the past year is 2.86%.

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