Altria’s Valuation Multiple Compared to Its Peers



Valuation multiple

The decline in Altria’s (MO) stock price due to the FDA’s announcement has also lowered its valuation multiple. As of April 3, the company was trading at a forward PE ratio of 12.7x—compared to 13.3x before the FDA’s announcement. On the same day, Philip Morris International (PM) was trading at a forward PE ratio of 15.6x.

In the above graph, you can see that Altria’s valuation multiple has fallen since the beginning of 2018. Increased anti-tobacco regulations, the decline in the cigarette shipment volume, and weakness in the broader equity market caused Altria’s stock price and valuation multiple to fall.

Article continues below advertisement

Analysts’ estimates

For 2019, analysts expect Altria to post revenues of $19.85 billion—a rise of 1.1% from $19.63 billion in 2018. During the same period, analysts expect the company’s EPS to rise 5.2% to $4.20.

Analysts’ recommendations

Among the 17 analysts that cover Altria, 47.1% recommended a “buy,” 35.3% recommended a “hold,” and 17.6% recommended a “sell.” Analysts have set a 12-month target price of $58.47 for the stock, which represents an upside potential of 8.3% from its stock price of $53.98 on April 3.

Among the 20 analysts that follow Philip Morris, 55% recommended a “buy,” 30% recommended a “hold,” and 15% recommended a “sell.” Analysts’ 12-month target price is $90.94—a rise of 6.0% from its stock price of $85.81.


More From Market Realist