Morgan Stanley’s downgrade
On January 22, Morgan Stanley downgraded Altria (MO) from “equal weight” to “underweight.” Morgan Stanley lowered the target price from $54 to $45. The new target price represents a fall of 6.9% from the closing price of $48.31 on January 18.
Other analysts’ recommendations
Among the 17 analysts that follow Altria, 47.1% recommended a “buy,” 35.3% recommended a “hold,” and 17.6% recommended a “sell.” On average, analysts have set a 12-month target price of $57.75, which represents an upside potential of 19.6% from Altria’s closing price on January 18.
Earlier this month, Cowen downgraded Altria from “outperform” to “market perform” due to concerns about the accelerating decline in its cigarette sales. Cowen also lowered its target price from $74 to $53. In December, Citigroup downgraded Altria from “neutral” to “sell” and lowered its target price from $67 to $45. On the same day, Stifel cut its target price from $70 to $59.
The downgrade caused Altria’s stock price to fall on January 22. At 12.44 PM EST, Altria was trading at $45.09, which represents a fall of 6.7% from the previous day’s closing price. Altria’s stock price was trading 2.2% lower YTD (year-to-date) as of the closing price on January 18. During the same period, Philip Morris International (PM) and British American Tobacco (BTI) have returned 10.5% and 3.3%, respectively. The broader comparative index, the Consumer Staples Select Sector SPDR ETF (XLP), which has invested 8.0% of its portfolio in cigarette and tobacco companies, has returned 3.3% YTD.