Analysts’ Forecasts for Altria’s 2Q17 Earnings

Earnings estimates

Analysts expect Altria Group (MO) to post EPS (earnings per share) of $0.86 in 2Q17, which represents a growth of 6.2% from 2Q16’s figure of $0.81. EPS growth is expected to be driven by revenue growth, net margin expansion, and share repurchases.

Analysts’ Forecasts for Altria’s 2Q17 Earnings

From the beginning of 3Q16 until the end of 1Q17, the company repurchased approximately 21.6 million shares for $1.44 billion, and by the end of 1Q17, the company had $1.38 billion available under its share repurchase program. Share repurchases boost Altria’s EPS by lowering the number of shares outstanding. In the graph above, we can see that the company has beat analysts’ estimates four times in last five quarters. When this happens, the stock price of the company tends to rise.

Peer comparison and outlook

In 2Q17, analysts expect Philip Morris International (PM) to post EPS growth of 7.0%, while Reynolds American (RAI) is expected to post EPS growth of 10.3%.

For the next four quarters, analysts expect Altria’s EPS to rise 10.9% from $3.04 to $3.37. The company’s 2017 EPS guidance is $3.26–$3.32, which represents a growth of 7.5%–9.5% from 2016.

Dividends

On May 18, 2017, Altria announced dividends of $0.61 per share at a dividend yield of 3.3% and a payout ratio of 74.4%. Analysts expect the company to pay quarterly dividends of $0.65 per share in 3Q17 and $0.66 per share in 4Q17. In 2017, analysts expect the company to pay dividends of $2.53, which represents a growth of 7.2% from the $2.36 paid in 2016. Next, we’ll look at Altria’s valuation multiples.