Richmond-based Altria Group, Inc. (MO) leads in providing tobacco products for U.S. consumers aged 21 and above. With a market cap of 76.9 billion, its combustible offerings include cigarettes and cigars, while smoke-free options encompass moist smokeless tobacco and oral nicotine pouches. Altria’s subsidiaries include top manufacturers of combustible and smoke-free products, such as Philip Morris USA Inc. (PM USA) and U.S. Smokeless Tobacco Company LLC (USSTC). It also holds equity stakes in Anheuser-Busch InBev SA/NV (ABI.BR) and Cronos Group Inc. (CRON), further diversifying its portfolio.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and Altria fits right into that category. Its market cap exceeds this threshold, reflecting its substantial size, stability, and influence in the tobacco sector.
Despite its strength, Altria shares are trading 5.1% below its 52-week high of $47.19, achieved on June 6. Also, shares of Altria are up marginally over the past three months, underperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 3.1% surge over the same time frame.
Over the longer term, MO stock is up 11.1% on a YTD basis, outperforming XLP’s 8% gains over the same time frame. However, shares of Altria rose 1.7% over the past 52 weeks, trailing XLP’s 4.2% returns.
Moreover, the stock has been on an uptrend recently, trading above its 100-day and 200-day moving averages since late April.
Altria has been maneuvering through a challenging terrain marked by shifting consumer preferences and macroeconomic uncertainties. Despite challenges in its smokeable products segment, the tobacco giant has maintained its growth momentum through strategic pricing strategies and a strong emphasis on smoke-free alternatives.
MO stock rose just 1.4% on April 25 following the release of its Q1 earnings results. Its adjusted EPS amounted to $1.15, missing Wall Street's expectations marginally. Altria also reaffirmed its full-year EPS, projecting between $5.05 and $5.17.
To emphasize the stock’s impressive price performance, it is worth noting that Altria’s top rival, British American Tobacco p.l.c. (BTI), continues to underperform MO. BTI stock has fallen 5.2% over the past 52 weeks but returned 6.3% on a YTD basis, lower than MO’s returns over the same time frames.
Given Altria’s mixed price performance, analysts are cautious about its future. The stock has a consensus rating of “Hold” from the 12 analysts covering it, and the mean price target of $45.78 reflects a premium of just 2.2% to current price levels.
On the date of publication, Kritika Sarmah 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.
