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Altria Group Gets Upgraded to a ‘Buy’

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Price movement

Altria Group (MO) has a market cap of $132.8 billion. It rose 0.33% to close at $67.85 per share on January 4, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.04%, 7.0%, and 0.34%, respectively, on the same day.

MO is trading 2.3% above its 20-day moving average, 5.0% above its 50-day moving average, and 6.4% above its 200-day moving average.

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Related ETF and peers

The Consumer Staples Select Sector SPDR ETF (XLP) invests 6.3% of its holdings in Altria Group. The YTD price movement of XLP was 0.37% on January 4, 2017.

The market caps of Altria Group’s competitors are as follows:

  • Philip Morris International (PM): $140.6 billion
  • British American Tobacco (BTI): $104.8 billion
  • Reynolds American (RAI): $79.1 billion

MO’s rating

On January 4, 2017, Bank of America Merrill Lynch upgraded Altria Group’s rating to a “buy” from “neutral” and set the stock’s price target at $75 per share.

Performance of Altria Group in 3Q16

Altria Group reported 3Q16 net revenue of $6.9 billion, a rise of 3.1% compared to $6.7 billion in 3Q15. Net revenue from smokable products, smokeless products, and wine rose 1.8%, 9.5%, and 9.6%, respectively, in 3Q16 compared to 3Q15.

The company’s gross profit margin and operating margin each expanded 10 basis points in 3Q16 compared to the prior year’s period.

Its net income and EPS (earnings per share) fell to $1.1 billion and $0.56, respectively, in 3Q16 compared to $1.5 billion and $0.78, respectively, in 3Q15. It reported adjusted EPS of $0.82 in 3Q16, a rise of 9.3% compared to 3Q15.

Altria’s cash and cash equivalents and inventories fell 3.0% and 2.5%, respectively, between 3Q16 and 4Q15. It expects adjusted EPS of $2.98–$3.04 for fiscal 2016, a rise of 6.5%–8.5%.

Next, let’s take a look at J&J Snack Foods (JJSF).

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