Altria Group: A Neutral Stance in the Face of Market Challenges and Limited Growth Prospects

Lisa Lewandowski, an analyst from Bank of America Securities, maintained the Hold rating on Altria Group (MO – Research Report). The associated price target remains the same with $45.00.

Lisa Lewandowski’s rating is based on a careful evaluation of Altria Group’s recent financial performance and market positioning. Despite Altria’s earnings per share (EPS) meeting the consensus estimates, the company’s operating companies income (OCI) fell short of both Bank of America’s and the broader market’s expectations. The reported decline in cigarette volumes aligns with industry trends, but the significant loss in oral tobacco market share to competitors in the nicotine pouch segment is particularly concerning. Moreover, while the company has reaffirmed its EPS guidance for 2024, growth prospects appear limited and are heavily reliant on its buyback program.

Altria’s financial maneuvers, including the partial divestiture of its beer investment and the subsequent share repurchase strategy, indicate a proactive approach to shareholder value. However, external factors such as potential regulatory changes and illegal vapor sales may negatively impact its combustible product volumes. The hold rating suggests that while the stock is maintaining its performance, the challenges it faces in identifying new growth avenues, combined with regulatory uncertainties, make it a less attractive option for investors seeking significant gains or clear-cut investment theses. Therefore, the neutral stance reflects a wait-and-see approach amidst a volatile market and industry landscape.

In another report released on April 19, Citi also reiterated a Hold rating on the stock with a $43.50 price target.

TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.

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.