TD Cowen analyst Vivien Azer has maintained their neutral stance on MO stock, giving a Hold rating today.
Vivien Azer has given her Hold rating due to a combination of factors related to the Altria Group’s performance. Altria Group’s 3Q23 EPS of $1.28 was slightly below consensus expectations and cigarette volumes continued to be under pressure, falling below medium-term trends. Despite a few positive aspects such as stabilizing Marlboro shares and strong price realization contributing to EBIT margin improvement, the company’s guidance was lowered for the second consecutive quarter, and EPS growth was now expected to only be between 1.5-3.0%.
Balancing this, the report highlights robust growth in the smokeless segment, with a strong 2.2% top-line growth driven by higher pricing and lower promotional spending, particularly around the on! brand. Despite volume declines, segment OCI margins saw a significant improvement. Furthermore, progress with the NJOY brand was on track, with unchanged market shares, improved supply chain capabilities, and increased retail distribution. Azer, however, views these positive factors as insufficient to warrant a buy rating, hence the decision to maintain the Hold rating.
In another report released today, Bank of America Securities also maintained a Hold rating on the stock with a $47.00 price target.
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Altria Group (MO) Company Description:
Virginia-based Altria Group, Inc. is a tobacco company, which manufactures and sells cigarettes, smokeless products, and wine in the United States. Its most popular cigarette brand is Marlboro. It sells cigars principally under the Black & Mild brand, and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands. The company also produces and sells varietal and blended table wines, and sparkling wines under the Chateau Ste. Michelle and 14 Hands labels. It also owns wineries in or distributes wines from several other wine regions.
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