S&P 500   5,088.80 (+0.03%)
DOW   39,131.53 (+0.16%)
QQQ   436.78 (-0.29%)
AAPL   182.52 (-1.00%)
MSFT   410.34 (-0.32%)
META   484.03 (-0.43%)
GOOGL   143.96 (-0.09%)
AMZN   174.99 (+0.23%)
TSLA   191.97 (-2.76%)
NVDA   788.17 (+0.36%)
NIO   5.40 (-7.69%)
AMD   176.52 (-2.94%)
BABA   75.96 (-0.21%)
T   16.80 (+1.27%)
F   12.14 (+0.17%)
MU   86.00 (+0.10%)
CGC   3.36 (-0.30%)
GE   153.33 (+1.09%)
DIS   107.74 (+0.09%)
AMC   4.44 (+0.45%)
PFE   27.76 (+0.76%)
PYPL   59.16 (+1.39%)
XOM   103.84 (-0.88%)
S&P 500   5,088.80 (+0.03%)
DOW   39,131.53 (+0.16%)
QQQ   436.78 (-0.29%)
AAPL   182.52 (-1.00%)
MSFT   410.34 (-0.32%)
META   484.03 (-0.43%)
GOOGL   143.96 (-0.09%)
AMZN   174.99 (+0.23%)
TSLA   191.97 (-2.76%)
NVDA   788.17 (+0.36%)
NIO   5.40 (-7.69%)
AMD   176.52 (-2.94%)
BABA   75.96 (-0.21%)
T   16.80 (+1.27%)
F   12.14 (+0.17%)
MU   86.00 (+0.10%)
CGC   3.36 (-0.30%)
GE   153.33 (+1.09%)
DIS   107.74 (+0.09%)
AMC   4.44 (+0.45%)
PFE   27.76 (+0.76%)
PYPL   59.16 (+1.39%)
XOM   103.84 (-0.88%)
S&P 500   5,088.80 (+0.03%)
DOW   39,131.53 (+0.16%)
QQQ   436.78 (-0.29%)
AAPL   182.52 (-1.00%)
MSFT   410.34 (-0.32%)
META   484.03 (-0.43%)
GOOGL   143.96 (-0.09%)
AMZN   174.99 (+0.23%)
TSLA   191.97 (-2.76%)
NVDA   788.17 (+0.36%)
NIO   5.40 (-7.69%)
AMD   176.52 (-2.94%)
BABA   75.96 (-0.21%)
T   16.80 (+1.27%)
F   12.14 (+0.17%)
MU   86.00 (+0.10%)
CGC   3.36 (-0.30%)
GE   153.33 (+1.09%)
DIS   107.74 (+0.09%)
AMC   4.44 (+0.45%)
PFE   27.76 (+0.76%)
PYPL   59.16 (+1.39%)
XOM   103.84 (-0.88%)
S&P 500   5,088.80 (+0.03%)
DOW   39,131.53 (+0.16%)
QQQ   436.78 (-0.29%)
AAPL   182.52 (-1.00%)
MSFT   410.34 (-0.32%)
META   484.03 (-0.43%)
GOOGL   143.96 (-0.09%)
AMZN   174.99 (+0.23%)
TSLA   191.97 (-2.76%)
NVDA   788.17 (+0.36%)
NIO   5.40 (-7.69%)
AMD   176.52 (-2.94%)
BABA   75.96 (-0.21%)
T   16.80 (+1.27%)
F   12.14 (+0.17%)
MU   86.00 (+0.10%)
CGC   3.36 (-0.30%)
GE   153.33 (+1.09%)
DIS   107.74 (+0.09%)
AMC   4.44 (+0.45%)
PFE   27.76 (+0.76%)
PYPL   59.16 (+1.39%)
XOM   103.84 (-0.88%)

The One Question that Matters for Altria Stock

The One Question that Matters for Altria Stock Altria (NYSE:MO) stock is essentially flat after the company reported a miss in both revenue and earnings in its quarterly earnings report. The company delivered revenue of $5.41 billion which was shy of analysts’ estimates for $5.59 billion. Earnings were a narrower miss, with Altria posting $1.28 earnings per share (EPS). Analysts were forecasting EPS of $1.30. 

Key Points

  • Altria stock is flat after missing on both revenue and earnings. 
  • The company announced a new partnership that it hopes will invigorate its smokeless tobacco sector. 
  • Investors have to ask themselves if they believe the post-pandemic drop in cigarette sales will continue to accelerate. 
  • 5 stocks we like better than Altria Group

The top line number was also lower on a year-over-year basis, but the earnings numbers showed a slight gain. It’s important to note that while the company did narrow its projected range, it still expects full-year EPS to be higher in 2022 than in the prior year. The company is now saying EPS will fall in a range of $4.81 to $4.89. This is higher than the $4.61 reported for the full year in 2021 and shows a growth of 4.5% on the low end.  

Moving Towards a Smokeless Future 

A highlight of the report was the announcement of a partnership between Altria and JT Group (Japan Tobacco). The goal is to commercialize heat-not-burn cigarettes, including Japan Tobacco's product, Ploom. The first objective of this partnership will be for Altria to obtain regulatory approval for Ploom in the United States. 

This is the latest effort by Altria to expand its oral tobacco business. To that end, the company also announced it was exercising its option and exiting the non-compete agreement it had with Juul. This will give Altria the ability to partner with another e-cigarette company or relaunch its brand, which it exited in 2018 when it purchased a stake in Juul.  

What's the Link Between Smoking and Recessions? 

Investors should ask whether they believe consumers will cut back on smoking cigarettes. In Altria’s presentation to investors, it showed a 3% decline in cigarette sales from this quarter to the same quarter in 2021. That’s about double the industry average, and it’s not a trend that started in 2021.  

But here’s what investors should note. In 2020, the decline in cigarette sales reversed. That’s not to say they increased, but they didn’t go down. Altria CEO Billy Gifford pointed out on the conference call that the company never viewed 2020 as anything more than an anomaly.  


That may be true, but sin stocks have a way of delivering the goods in terms of revenue and earnings, even during difficult times.  

If consumers do stick with their habit, here’s something else that the company showed in its earnings presentation: Consumers have more brand loyalty to cigarettes than alcohol, groceries or other household items, regardless of price. Altria is home to the Marlboro brand, which captures over 58% of the premium segment, which you might think will be less impacted in a recession.  

Is MO Stock a Buy?  

Prior to the earnings report, MO stock was rated as a "hold" by the analysts tracked by MarketBeat. For the first half of 2022, MO stock was on the rise. In fact, in early May (prior to the first interest rate hike), the stock was up 19% for the year. Post earnings, the stock is basically flat but still outperforms the broader market. 

The stock did cross above its 50-day moving average and bumps up against its 200-day moving average. For now, that looks to be an area of resistance.

Can MO stock push through? History suggests it might. The period after a midterm election is typically bullish for stocks. Even if it’s not, you get a solid dividend to boost your total return. Currently, the stock pays out $3.76 per share on an annual basis and an 8.14% dividend yield. Plus, the company has increased its dividend for the last 12 consecutive years.  

→ Elon Musk's "Project Dojo" is a Game-Changer (From Stansberry Research) (Ad)

Should you invest $1,000 in Altria Group right now?

Before you consider Altria Group, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Altria Group wasn't on the list.

While Altria Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Beginner's Guide to Pot Stock Investing Cover

Click the link below and we'll send you MarketBeat's guide to pot stock investing and which pot companies show the most promise.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Altria Group (MO)
3.6235 of 5 stars
$41.13+0.6%9.53%9.00Hold$47.22
Compare These Stocks  Add These Stocks to My Watchlist 

Chris Markoch

About Chris Markoch

  • CTMarkoch@msn.com

Editor & Contributing Author

Retirement, Individual Investing

Experience

Chris Markoch has been an editor & contributing writer for MarketBeat since 2018.

Areas of Expertise

Value investing, retirement stocks, dividend stocks

Education

Bachelor of Arts, The University of Akron

Past Experience

InvestorPlace


Featured Articles and Offers

Search Headlines: