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As Altria Group, Inc. (NYSE:MO) announced its earnings release on 31 March 2019, analysts seem cautiously optimistic, with profits predicted to increase by 25% next year compared with the past 5-year average growth rate of 19%. With trailing-twelve-month net income at current levels of US$7.0b, we should see this rise to US$8.7b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Altria Group in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Altria Group to keep growing?
The 14 analysts covering MO view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$7.0b and the final forecast of US$9.8b by 2022, the annual rate of growth for MO’s earnings is 6.1%. This leads to an EPS of $4.7 in the final year of projections relative to the current EPS of $3.69. With a current profit margin of 35%, this movement will result in a margin of 47% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Altria Group, I've put together three pertinent aspects you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Altria Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Altria Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Altria Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.