Altria (MO) Gains As Market Dips: What You Should Know

Altria (MO) closed the most recent trading day at $48.78, moving +0.6% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.95%. At the same time, the Dow lost 0.67%, and the tech-heavy Nasdaq lost 1.51%.

Coming into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 7.46% in the past month. In that same time, the Consumer Staples sector gained 2.08%, while the S&P 500 gained 4.32%.

MO will be looking to display strength as it nears its next earnings release. On that day, MO is projected to report earnings of $1.09 per share, which would represent year-over-year growth of 7.92%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.05 billion, up 3.55% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.18 per share and revenue of $19.66 billion, which would represent changes of +4.76% and +0.17%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MO. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. MO is currently a Zacks Rank #3 (Hold).

Digging into valuation, MO currently has a Forward P/E ratio of 11.61. For comparison, its industry has an average Forward P/E of 12.23, which means MO is trading at a discount to the group.

Also, we should mention that MO has a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Tobacco industry currently had an average PEG ratio of 1.52 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 226, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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