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Altria’s Earnings: Analysts’ Expectations in 2019

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Analysts’ estimates

For 2019, Altria Group’s (MO) management expects the company to post a diluted EPS of $4.15–$4.27, which represents 4%–7% growth from $3.99 in 2018. For the same period, analysts expect the company to post an adjusted EPS of $4.20—a rise of 5.3% year-over-year. The revenue growth, higher EBIT margin, and share repurchases will likely drive the company’s EPS in 2019. However, some of the increase in Altria’s EPS will likely be offset by higher interest expenses and a higher effective tax rate.

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For 2019, analysts expect Altria to post revenues of $19.70 billion—an increase of 0.4% from $19.63 billion in 2018. The favorable pricing is expected to drive the company’s revenues. However, the decline in the total cigarette shipment volume will likely offset some of the increase in Altria’s revenues. The company’s management expects the total domestic cigarette industry volume to decline 4%–5% during 2019.

Analysts expect Altria’s EBIT margin to expand from 49.1% to 54.5%. Favorable pricing and cost reduction programs will likely improve Altria’s EBIT margin. The company’s interest expenses are expected to rise due to an increase in the debt incurred for the acquisition of Cronos Group and Juul Labs. Analysts expect the company’s effective tax rate to be 24%—compared to 23.1% in 2018.

Moving to share repurchases, Altria repurchased 2.7 million shares for $151 million in the first quarter. By the end of the first quarter, Altria had $195 million under its share repurchase program.

Peer comparisons

For 2019, analysts expect Philip Morris International (PM) to post an adjusted EPS of $5.15—an increase of 0.9% from $5.10 in 2018.

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