Based in Richmond, Virginia, Altria Group, Inc. (MO) is a leading manufacturer and seller of smokeable and oral tobacco products in the U.S. With a market capitalization of $77.12 billion, the company's primary brands include Marlboro and Black & Mild. Altria owns Philip Morris USA, the most profitable cigarette manufacturer in the United States, as well as John Middleton, a prominent U.S. cigar manufacturer.
Shares of this leading tobacco manufacturer have underperformed the broader market considerably over the past year. MO has declined 1.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.6%. But in 2024, things turned favorable - MO stock is up 11.7%, surpassing the SPX’s 9.5% rise on a YTD basis.
Narrowing the focus, MO’s outperformance looks more pronounced compared to Consumer Staples Select Sector SPDR Fund (XLP). MO has comfortably outperformed the exchange-traded fund’s 7.4% YTD returns.
On March 14, MO’s shares rose nearly 2.2% after the tobacco maker said it plans to sell 35 million shares of Anheuser-Busch InBev through a public offering at $61.50 a share and will sell $200 million worth of the stock directly to Anheuser-Busch. MO expects to receive $2.4 billion from the sale.
For the current fiscal year, ending in December, analysts expect MO to report an EPS growth of 3.2% to $5.11 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in two of the last four quarters while missing forecasts on two other occasions.
Among the 11 analysts covering MO stock, the consensus rating is a “Hold.” That’s based on four “Strong Buy” ratings, five “Holds,” and two “Strong Sells.”
This configuration has been consistent over the past three months.
Recently, Jefferies analyst Owen Bennett maintained a Buy rating on MO stock with a price target of $48, implying a potential upside of 6.6% from current levels. The analyst maintained the Buy rating due to its resilient financial profile and the likelihood that it could deliver double-digit shareholder returns.
The mean price target of $45.78 represents a 1.6% premium to MO’s current price levels. The Street-high price target of $50 suggests an upside potential of 11%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
