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Altria Group: Analysts’ Recommendations

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Analysts’ recommendations

Among the 17 analysts that cover Altria Group (MO), 51.9% recommended a “buy” as of December 27, while 35.3% recommended a “hold” and 11.8% recommended a “sell.” On average, analysts have set a target price of $61.09, which represents an upside potential of 25.4% from its stock price of $48.70.

After Altria announced that it would acquire a 35% stake in Juul for $12.8 billion, Citigroup downgraded the stock to “sell” from “neutral.” Citigroup lowered the target price from $67 to $45. Stifel reduced the target price from $70 to $59.

On December 7, Barclays initiated coverage of Altria with an “overweight” rating and a target price of $64. On November 29, Jefferies cut its target price from $60 to $56. Wells Fargo lowered its target price from $75 to $65 on November 26.

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Peer comparisons

Among the 19 analysts that follow Philip Morris International (PM), 52.6% recommended a “buy,” 36.8% recommended a “hold,” and 10.5% recommended a “sell.” On average, analysts have given a 12-month target price of $93.25, which represents an upside potential of 39.9% from its stock price of $66.68.

Valuation multiple

The decline in Altria’s stock price has also brought its valuation multiple down. On December 27, Altria was trading at a forward PE ratio of 11.4x—compared to 19.7x at the beginning of 2018. In comparison, Philip Morris International was trading at a forward PE ratio of 12.6x on the same day.

Next, we’ll discuss analysts’ expectations for 2018 and 2019.

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