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How Altria’s Valuation Multiple Compares with Peers’

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Altria’s valuation multiple

Altria Group (MO) posted its fourth-quarter earnings on January 31. During the quarter, the company’s EPS met analysts’ expectations. However, its revenue fell short of analysts’ estimates. Despite posting lower-than-expected sales, the company’s stock price rose due to optimism surrounding Altria’s recent investment in JUUL Labs and Cronos Group (CRON). As of February 11, Altria was trading at $48.89, which represents a rise of 2.3% since the announcement of its fourth-quarter earnings.

The increase in Altria’s stock price has also raised its valuation multiple. On February 11, Altria was trading at 11.6x, compared to 11.3x before the announcement of its fourth-quarter earnings. In comparison, Philip Morris International (PM) was trading at 14.6x.

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As on February 11, Altria was trading at 11.7 times analysts’ 2019 EPS estimate of $4.20 and 10.9 times analysts’ 2020 EPS estimate of $4.48 with its EPS expected to grow 5.1% in 2019 and 6.8% in 2020. You can read about Altria’s fourth-quarter performance in Altria Stock Rose ~3% after Q4 Earnings Met Expectations.

Analysts’ recommendations

Of the 17 analysts who follow Altria, 47.1% have given the stock a “buy” rating while 35.3% are favoring a “hold” and 17.6% are favoring a “sell.” On average, analysts have set a price target of $56.80, which represents an upside potential of 16.2% from the stock’s February 11 closing price of $48.89.

Peer comparison

Of the 20 analysts who follow Philip Morris International (PM), 50% are favoring a “buy,” 35% are favoring a “hold,” and 15% are favoring a “sell” recommendation. On average, analysts have set a price target of $87.47, which represents an upside potential of 10.7% from the stock’s February 11 closing price of $79.05.

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