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Altria (MO) Gains But Lags Market: What You Should Know

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Zacks Equity Research
·3 min read
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Altria (MO) closed at $45.12 in the latest trading session, marking a +1.94% move from the prior day. This change lagged the S&P 500's 1.95% gain on the day. Elsewhere, the Dow gained 1.85%, while the tech-heavy Nasdaq added 1.55%.

Heading into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had gained 4.07% over the past month, outpacing the Consumer Staples sector's loss of 2.16% and the S&P 500's loss of 2.45% in that time.

Wall Street will be looking for positivity from MO as it approaches its next earnings report date. This is expected to be April 29, 2021. On that day, MO is projected to report earnings of $1.04 per share, which would represent a year-over-year decline of 4.59%. Our most recent consensus estimate is calling for quarterly revenue of $4.94 billion, down 2.12% from the year-ago period.

MO's full-year Zacks Consensus Estimates are calling for earnings of $4.57 per share and revenue of $21.41 billion. These results would represent year-over-year changes of +4.82% and +2.71%, respectively.

It is also important to note the recent changes to analyst estimates for MO. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.16% lower. MO is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, MO is currently trading at a Forward P/E ratio of 9.68. This valuation marks a discount compared to its industry's average Forward P/E of 10.16.

Also, we should mention that MO has a PEG ratio of 2.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Tobacco was holding an average PEG ratio of 1.78 at yesterday's closing price.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 113, putting it in the top 45% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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