Yahoo Finance Altria Group, Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts
Altria Group, Inc. (NYSE:MO) shares fell 5.4% to US$47.53 in the week since its latest yearly results. Revenues came in at US$20b, in line with estimates, while Altria Group reported a statutory loss of US$0.70 per share, well short of prior analyst forecasts for a profit. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
View our latest analysis for Altria Group
Taking into account the latest results, the most recent consensus for Altria Group from twelve analysts is for revenues of US$20.7b in 2020, which is a satisfactory 4.5% increase on its sales over the past 12 months. Altria Group is also expected to turn profitable, with statutory earnings of US$4.32 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$20.2b and earnings per share (EPS) of US$4.31 in 2020. So it looks like there's been no major change in sentiment following the latest results, although analysts have made a small increase to to revenue forecasts.
It may not be a surprise to see that analysts have reconfirmed their price target of US$55.26, implying that the uplift in sales is not expected to greatly contribute to Altria Group's valuation in the near term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Altria Group, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$48.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Further, we can compare these estimates to past performance, and see how Altria Group forecasts compare to the wider market's forecast performance. It's clear from the latest estimates that Altria Group's rate of growth is expected to accelerate meaningfully, with forecast 4.5% revenue growth noticeably faster than its historical growth of 1.5%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 3.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Altria Group to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Altria Group going out to 2024, and you can see them free on our platform here.
You can also see whether Altria Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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